standards and regulations in international...

Conclusions of the Round Table -9

UNITED NATIONSECONOMIC COMMISSION FOR EUROPE

STANDARDSAND

REGULATIONS ININTERNATIONAL TRADE

SUMMARY OF PROCEEDINGS

Round Table on the impact of standards on international tradeGeneva, 15 June 1998

-8 Standards and Regulations in International Trade

ECE/TRADE/248

The views expressed and the designations employed in this publicationare those of the author and do not necessarily reflect the views of the UnitedNations Secretariat nor do they express any opinion whatsoever on the part ofthe Secretariat concerning the legal status of any country, territory, city or areaor of its authorities, or concerning the delimitation of its frontiers or boundaries.

All material may be freely quoted or reprinted, but acknowledgement isrequested, together with a copy of the publication containing the quotation orreprint (to be sent to the following address: Trade and Investment PromotionSection, Trade Division, United Nations Economic Commission for Europe,Palais des Nations, Geneva 10, CH-1211 Switzerland).

UNITED NATIONS PUBLICATIONS

Sales No. E.99-II-E-41

ISBN 92-1-116742-6ISSN 1020-7384


CONTENTS

Introduction ...................................................................................................... v

Overview of the issues ..................................................................................... 1

Trade-related harmonization issues and the multilateral trading system ......... 13

The role of technical harmonization in regional integration ............................ 35

Integration of countries in economic transition into the multilateral tradingsystem ........................................................................................................... 51

Transition economies and integration into the internal market of theEuropean Union ............................................................................................ 73

Role of UN/ECE in standard-setting and standardization-related areas .......... 93

Conclusions of the Round Table ...................................................................... 107

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Preface

United Nations Economic Commission for EuropeTrade and Investment Guide Series

The purpose of this series of trade and investment guides is to assist economiesin transition, as well as economic actors in other countries, to become familiar withbest practices in the areas of trade, investment and related legal and commercialpractices. The guides are developed under the aegis of the United Nations EconomicCommission for Europe’s Committee for Trade, Industry and Enterprise Develop-ment and its subsidiary bodies, in this case the Working Party on Technical Harmo-nization and Standardization Policies.

The present guide was prepared by Miroslav N. Jovanovic, with substantial in-put from Serguei Kouzmine. Text editing was done by Christina O’Shaughnessy.

This is the second guide. The first title in this series is: “Trade Finance inTransition Economies: Practical Ways to Support Exports and Imports” and can beobtained from the UN Publications Service:

In Geneva: Tel. + 41 22 917 2613 - Fax + 41 22 917 0027-e-mail: [email protected] New York: Tel. + 1 212 963 8302 - Fax + 1 212 963 3489-e-mail: [email protected]

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INTRODUCTIONCarol Cosgrove-Sacks1

The countries of central and eastern Europe have madeconsiderable progress during the 1990s in their economictransition towards a market-based system as well as re-garding their inclusion in the world economy. The levelof progress has varied, however, from one country to an-other and there is still much to be reformed before theywill achieve fully operating market economies.

A particular challenge for them will be to adjust to thestandards, norms and regulations which are used ininternational trade. This is where the United Nations Eco-nomic Commission for Europe (UN/ECE) plays a role.UN/ECE provides a neutral and transparent internationalforum for setting these norms and standards which forman essential support for trade and development. Throughits Committee for Trade, Industry and Enterprise Devel-opment, UN/ECE supervises an array of intergovernmen-tal bodies that define such norms and standards.

Under the auspices of the Committee, significant workis being done by UN/CEFACT (Centre for the Facilita-tion of Procedures and Practices for Administration,Commerce and Transport) in relation to trade-facilitationstandards and recommendations. The UN/ECE WorkingParty on Standardization of Perishable Produce and Qual-ity Development deals with harmonizing national stand-ards for a wide range of agricultural products intointernational standards of commercial quality.

The Working Party on Technical Harmonization andStandardization Policies develops, adopts and appliesharmonized standards, technical regulations and con-formity-assessment procedures. The Working Party’ssessions serve as a forum for UN/ECE member States toestablish a practical dialogue among national standard-setting bodies and their counterparts in regional and inter-national standardization organizations.

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1 Director, Trade Division, UN/ECE, Geneva.


The Committee works towards developing closer eco-nomic relations among member States by assisting themin creating legal, administrative and business environ-ments that are conducive to the creation of trade, invest-ment and economic links. Eliminating technical barriersto trade is one of the major concerns of the Committee.Thus, in conjunction with its second session, in June1998, the Committee organized a Round Table on Stand-ards, Norms and Regulations and their Impact on Interna-tional Trade.

Participants included representatives of internationaland regional standards and standardization organizations,national standards bodies from both market and transitioneconomies (central and eastern Europe), delegates to theCommittee session, diplomats from Geneva-based per-manent missions and business persons.

The speakers represented, on the one hand, national,regional and international bodies and organizations re-sponsible for setting standards or regulations as well asfor formulating and implementing standardization poli-cies, and, on the other hand, private companies who intheir day-to-day operations have to abide by and usestandards and regulations. The speakers were:

(a) From the UN/ECE secretariat:

Yves BERTHELOT, Executive SecretaryCarol COSGROVE-SACKS, Director, TradeDivision;

(b) From UN/ECE subsidiary bodies:

Christer ARVIUS, Commercial Counsellor,National Board of Trade, Sweden; and Chairman,UN/ECE Working Party on Technical Harmoniza-tion and Standardization Policies

Miguel VILCHEZ BARROS, national coordinatorfor standardization, certification and conformity as-sessment; and Chairman, UN/ECE Working Partyon Standardization of Perishable Produce and Qual-ity Development

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Ray WALKER, Adviser, Department of Trade andIndustry, United Kingdom; and Vice-Chairman,UN/CEFACT;

(c) From international and regional organizations:

Philippe DENGLER, Manager, TechnicalCooperation Unit, European Committee for Stand-ardization (CEN)

Anwar EL-TAWIL, Director of the Programme,International Organization for Standardization(ISO)

Vivien LIU, Secretary, Committee on TechnicalBarriers to Trade, World Trade Organization(WTO);

(d) From transition economies:

Igor KOROVKIN, Head of Department, StateCommittee for Standardization, Metrology andCertification, Russian Federation

Gyorgy PONYAI, General Director, HungarianStandards Institute;

(e) From the private sector :

Larry GOETZ, Associate Director, Procter &Gamble, United Kingdom

Sten LARSSON, Vice-President, Volvo (Belgium).

The Round Table examined the most important stand-ardization-related problems at the international level andon how these are addressed by a number of internationalorganizations. It also discussed the rules and practices ac-cepted in WTO. Another strong focus of the Round Tablewas on the problems of economic and institutional trans-formation of the countries in transition and on the rel-evance to these countries of the experience of developedmarket countries with standards and related regulations.In geographical terms, the focus was primarily on centraland eastern European countries with transition econo-mies.

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After identifying and discussing the above problems,participants proposed concrete solutions to a variety ofproblems. Their recommendations appear in the formalconclusions of the meeting.

In order to stimulate discussion and dialogue at theRound Table, the UN/ECE secretariat made available tothe participants a number of background papers. Six suchbackground papers on the subject of standards, norms andregulations in international trade were prepared and sub-mitted to the Round Table. They devoted special attentionto the impact of standards and regulations on countries ineconomic transition. These papers were prepared for thesecretariat by experts to offer insight into various ap-proaches to standardization issues and into the most acuteproblems on the international, regional and nationallevels. A selection of these papers were edited and arepresented in this publication.

The purpose of publishing these papers is to elucidatethe importance of norms, standards and regulations ininternational trade. An additional objective is to highlightsome specific challenges that are facing countries in eco-nomic transition. Most of the papers are oriented to theneeds of these countries to move towards the standards,norms and regulations which are accepted, applied andenforced in market-based economies.

The papers could also serve as an information base andanalytical background for policy makers to evaluate alter-native policy proposals and their impact on the economictransition and on integration into the world trading sys-tem. As such, they may contribute to establishing a posi-tive policy agenda in countries with economies intransition. In addition, traders, investors, lawyers and oth-er business persons may find information on the achieve-ments, problems and expectations about futuredevelopments regarding norms, standards and regulationsin countries in economic transition and elsewhere.

We express our grateful thanks to the contributors ofpapers, the speakers and the participants, whose interven-tions so enriched the discussions, bringing new dimen-sions to the debate and helping to see standardization-

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related problems from global, national and sectoral pointsof view.

The present publication is structured as follows: it be-gins with an overview of the main issues raised and dis-cussed at the Round Table. It is followed by a paperdiscussing trade–related harmonization issues in themultilateral trading system. Another paper analyses therole of technical harmonization in major regional integra-tion groups. The subject matter of the third paper consistsof the problems of integrating countries in economic tran-sition into the multilateral trading system. The norms-related requirements for the entry of the European Unionand the situation in transition economies acceding to EUare discussed in the fourth paper. The final paper exam-ines the role of UN/ECE in standards-related areas. Thepublication also includes the text of the conclusions of theRound Table.

UN/ECE is keenly interested in the issue of norms,standards and regulations in international trade and wel-comes an exchange of ideas and a pooling of experienceand cooperation in this and other related matters. The aimis to develop a trading system in which norms, standardsand regulations, rather than form a barrier, bring partnerstogether, the ultimate goal being to improve assistance toits member countries, in particular those that are currentlyundergoing economic transition.

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0 Standards and Regulations in International Trade

Conclusions of the Round Table 1

OVERVIEW OF THE ISSUESChrister ARVIUS1

I. STANDARDS, REGULATIONS ANDINTERNATIONAL TRADE

Standards have many roles and functions. Not only dothey establish a common trading language between buy-ers and sellers, but they also ensure public safety and theprotection of the environment within and outside nationalborders. Moreover, in today’s globalized production sys-tems, standards ensure that parts produced across bordersfit and that networks are compatible. Regulations andstandards and the verification of their application throughconformity assessment procedures have, therefore, manybenefits. However, inappropriate regulations can result inhigh costs and inefficiencies in trading partner countriesas well as in the domestic economy and have internationalrepercussions.

Although the following discussion papers focus ontransition economies, inefficiencies also exist in devel-oped market economies. Today, many countries and re-gional bodies are reconsidering their standardization andrelated policies and reforming and upgrading their stand-ards and regulations. In addition, national regulators inthe West rely more and more on certain key principlessuch as taking into account the implications for small andmedium-sized enterprises, using performance-based in-stead of design-oriented standards or carefully balancingpublic safety and economic interests. The overwhelmingopinion today is that the regulatory process requires greatdiscipline, coordination, accountability and transparency,both in the established market economies and in the tran-sition countries.

1Chairman, UN/ECE Working Party on Technical Harmonizationand Standardization Policies.

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These papers attempt to explain an essential and, as faras international trade is concerned, the most important,aspect of standardization and related procedures, i.e. thecrucial outward effect of domestic rules and procedureson both international trade and investment. Restrictive ordiscriminatory national measures reduce the market entryprospects of foreign companies. A lack of transparentregulations has a significant negative effect on foreignfirms, and duplicative certification procedures imposemultiple costs on foreign business operators and result inan obvious reduction of related economies of scale. Even-tually, consumer welfare decreases and the innovativecapabilities of the economy become limited. A recentexample of how inefficiencies and bad resource alloca-tions could be eliminated is the Single European Marketof the European Union. Although this regional groupinghad already existed for a long time, substantial cost andprice reductions were achieved when domestic barrierswere removed and full benefit could be reaped from thepositive external trade and investment effects of thisreduction in trade barriers.

II. THE CHALLENGES FORECONOMIES IN TRANSITION

For transition economies, the challenge is double; notonly are these countries faced with the same concerns andproblem areas described above, but they also have a pastlegacy which is not easy to overcome. Some of the mosturgent areas which have been identified and requireappropriate attention are the following:

• Lack of transparency with respect to standards andcertification procedures themselves, and also with re-spect to obtaining information, i.e. difficulties of time-ly receipt of the texts of standards and regulations, oftheir translation into other languages and the feesinvolved;

• Multiple certification requirements and the non-ac-ceptance of foreign test results or certificates;

• Lack of internationally accepted accreditation pro-cedures;

Overview of the Issues 3

• Rigid structures and too stringent government control;i.e. still too frequent use of pre-market certification(instead of manufacturer’s declarations and marketsurveillance procedures) and lack of voluntary stand-ardization (sometimes, in practice, an absence of dis-tinction between voluntary standards and mandatorytechnical specifications or regulations);

• Use of national instead of similar international stand-ards and conformity assessment procedures;

• Implementation and enforcement problems; i.e. lackof required institutions (for example, for market sur-veillance), trained personnel, modern instruments andtesting devices.

These problems result in an environment of uneasinessand uncertainty creating, as indicated by business opera-tors, many possibilities for abuse, fraud and discrimina-tory practices with resulting high costs for both domesticand foreign trading partners. Since trade opportunitiescan only grow once diverging standards and duplicativeprocedures have been eliminated, national rules should beharmonized as much as possible with international regu-latory practices. Once regulatory procedures have beenstreamlined and transparency and flexibility have gainedground, efficiencies and benefits from trade and the re-allocation of resources will emerge and increase. Therequired reforms are therefore first and foremost domesticreforms which should deal with aspects such as:

• Reviewing existing standards and conformity assess-ment procedures to ensure international harmoniza-tion;

• More frequent use of performance standards (insteadof design standards);

• Introducing new approaches such as market surveil-lance (instead of mandatory pre-market certification)and making recourse to product liability legislation;

• Possible reassigning of the tasks of institutions ororganizations involved and training of personnel.

It is also extremely important to raise the awareness ofdomestic regulators in transition economies as to the im-pact national rules and procedures have on international


trade and investment decisions. As restrictive standardsand duplicative and, often confusing procedures in con-formity assessment impose high burdens on foreignfirms, it can make them reconsider whether or not a par-ticular market should be entered or a production facilityshould be built. Thus, while it might be difficult to assessthe alleged positive influence of existing non-tariff barri-ers on domestic industry, their negative impact on the in-flow of foreign capital which transition economies badlyrequire for the overall economic development is certainlyprofound.

In practice, the experience of the developed marketeconomies or of regional groupings provides useful prec-edents and guidelines for individual products, sectors orpolicies. On the international level, organizations such asthe United Nations provide guidance and expertise. Re-gional organizations such as the European Union towhich many of the countries of central and eastern Europeaspire to accede, have their assistance mechanisms to helpand prepare transition economies. The internationallyagreed-on framework of the World Trade Organization(WTO) encourages and complements the efforts of indi-vidual countries to increase trade and investment oppor-tunities, economic efficiencies and transparency. WTOpromotes harmonization and the expansion of mutual rec-ognition agreements and establishes the commitment ofnational treatment, avoidance of unnecessary traderestrictiveness and proportionality.

The transition economies themselves (particularly incentral Europe) have made great progress in the pastyears. With different degrees of effort and success, stand-ardization policies have been reformed, standards havebeen adapted to international rules, institutional changeshave been initialized or even accomplished and certifica-tion procedures have been restructured. Many countriesof the region received funds and training, which permitteda faster transition to internationally accepted standardiza-tion practices. Furthermore, the aspired integration intoeither the European Union or WTO or the world economyhas been a very strong incentive for all countriesconcerned and has spurred efforts over the past few years.

Despite these positive developments, there is still along way to go. It is a complicated but challenging task to


find appropriate remedies for the problems describedabove; it takes time and human and financial resources tochange procedures and mentalities, to reform institutions,to improve consumer information flows in order to avoidtoo stringent market regulations, to raise the awareness ofnational regulators with respect to international agree-ments, or explain to industry the new standardization andtrade regimes and their concrete implications.

The experience in established market economiesshows that even when basic international principles havebeen implemented and enforced, regulatory reform is stillrequired. A complex and ongoing process, it can onlywork with a dynamic, open reform agenda combining thevarious elements of good regulatory practice, standardi-zation, certification and accreditation. Furthermore, mostcountries have divergent social and economic objectivesand policies. Therefore, despite all international or re-gional efforts in harmonizing or reforming at the samepace and level, regulations, procedures and practiceswill continue to differ and diverge between individualcountries.

III. ROUND TABLE ON STANDARDS,NORMS AND REGULATIONS ANDTHEIR IMPACT ONINTERNATIONAL TRADE

Discussions at the Round Table held on 15 June 1998showed that many of the key issues relating to standardi-zation and development of trade in the UN/ECE regionare closely linked to similar issues on the global level.Hence, it is extremely important to see all standardizationdevelopments in both a regional and an international con-text with respect to how they affect global trade. The im-portance of such a focus has been voiced by many parties.

The globalization of business operations and the grow-ing involvement of companies in international trade arethe most striking features of today’s world economy. Thisis largely the result of technological progress, with newproducts and services being launched on the market con-tinuously. It is also due to changes in the way traditionalservices/manufacturing of goods are provided, as well as


to the increase in the number of players since the openingof new markets. When companies move away from theirdomestic markets to compete internationally, whetherthey succeed or fail often depends on how familiar theyare with the regulations and standards in export markets.

As trade becomes increasingly international, obstaclesto international trade become increasingly apparent. Forinstance, following the continued reduction in tariff barri-ers, the importance of non-tariff barriers is increasing inthe form of different technical regulations and standardsin different markets. Significant differences between na-tional and international standards are also making it moredifficult for local companies to sell in foreign markets.Business operators claim that national technical regula-tions and procedures sometimes place them in an unfairposition vis-à-vis domestic producers and shield localproducers from foreign competition.

At present, significant changes are occurring in severalmajor parts of the world, such as the single market inte-gration of the European Union countries, the transforma-tion to market economies in eastern Europe, theestablishment of free trade agreements on the NorthAmerican continent and similar efforts in other regions.All these changes give impetus to the need for encourag-ing the development and adoption of harmonized—or atleast compatible—standards and conformity assessmentprocedures on an international scale.

The countries of central and eastern Europe are striv-ing to develop a market economy on the thesis that regu-lations, standards and procedures for attesting conformityassessment to regulations and standards must be consist-ent with existing world markets if their economic transi-tion should succeed. International harmonization oftechnical regulations and standards issues has become avital matter for bolstering domestic economies and assur-ing the benefits of their international trade.

The usefulness of eventually harmonizing regulationsand standards internationally is evident. In the meantime,Governments and national bodies should try to create asimple and transparent framework for adopting and ap-plying their national technical regulations and standards.They should also keep foreign companies informed on


how to meet these requirements. Ideally, various coun-tries would adopt and use internationally harmonizedtechnical regulations and standards. As intermediatemeasures, countries could recognize equivalent regula-tions or standards. Such regulations or standards could atfirst permit a comparison of the differences in require-ments for a product/service in the countries concernedand provide a basis for their eventual harmonization.Where harmonization is not immediately possible, coun-tries might also rely on national conformity assessmentprocedures. These procedures would assure importersthat their products complied with the technical specifica-tions required to gain access to a particular market.Hence, mutual confidence in those aspects could pave theway for countries to agree to accepting the results of testsor certification carried on by foreign conformity-assess-ment bodies in accordance with the requirements of animporting country. Exporters could thereby complete thenecessary procedures and supply goods with the requireddata so that the importing country could dispense with theneed for further testing or certification.

The above factors constitute the framework for inter-national standardization activities of a large number ofinternational organizations, both governmental and non-governmental, which vary widely in structure, proceduresand basis for participation.

IV. THE ROLE OF THE UN/ECEWORKING PARTY ON TECHNICALHARMONIZATION ANDSTANDARDIZATION POLICIES

The UN/ECE Working Party on Technical Harmoni-zation and Standardization Policies is an intergovernmen-tal group of experts which looks into standardization-related problems at international, regional and nationallevels and tries to seek solutions in support of tradeexchanges in the UN/ECE region.

Member States have full autonomy in their choice ofregulatory tools or mechanisms to protect the public inter-est with regard to health, safety, environmental protec-tion, etc. The purpose of the discussions at the Working


Party’s sessions is to attract attention to unnecessary ob-stacles and to help Governments achieve a reasonablebalance between national measures taken and the impactof these measures on international trade and cooperation.

It is a major concern of the Working Party to encour-age the development, adoption and application of harmo-nized technical regulations and standards, as well asconformity assessment operations, in member States ofthe UN/ECE region. The Working Party devotes specialattention to countries in transition with a view to provid-ing them with recommendations/policy options to facili-tate their market reforms and integration into the worldeconomy.

Ways in which the activities of the Working Partycould assist Governments in finding solutions to the com-plex set of issues in the standardization area were identi-fied by participants in the Round Table and mentioned inthe discussion papers in this publication. Besides actingas a think-tank on major global issues, as it was notedabove, the Working Party also examines specific problemareas brought to its attention by Governments or businessoperators.

The specific activities of the Working Party fall intothree categories: coordination, harmonization and con-formity assessment. In addition, the Working Party moni-tors and coordinates the standardization-related activitiesof the UN/ECE principal subsidiary bodies and the secre-tariat.

In the area of coordination the Working Party is, for in-stance, preparing and updating a list of sectors in whichmember States consider that additional internationalstandardization work would be useful and whose Govern-ments consider it appropriate to develop regulations forreasons of safety, health, ecology, etc. It also formulatesand disseminates recommendations on standardization,conformity assessment, mutual recognition agreementsand other issues related to standardization policies.

In the area of harmonization the main emphasis is onproviding Governments with ideas and possible solutionsfor bringing their regulatory, standardization and con-formity assessment systems into line with internationaldevelopments; for adjusting and modifying regulatory re-


gimes to make them compatible with those of other coun-tries, and for streamlining and increasing the efficiency ofinformation back-up structures on standardization issues.

As for conformity assessment activities, the aim is topromote a better understanding of how to build confi-dence in countries’ and organizations’ capacity to test andin quality registering and other elements of conformityassessment services. One such tool is mutual agreementson conformity assessment, which enable manufacturers totest a product once and obtain its certification and accept-ance in a number of markets. The mutual recognition oftest data, product certification and recognized compe-tence of accredited conformity assessment bodies repre-sent significant potential for increased trade. Otherwise,companies are obliged to perform additional or repeatedtests of their products overseas or to invite foreign inspec-tors to make factory inspections. Such requirements meanhigher fees for exporting companies and increase thecosts of their products on the market.

The above activities of the Working Party aim to drawattention to problems of an international nature that can-not be solved by international standardization until na-tional legislation is harmonized. That is why sessions ofthe Working Party are attended not only by delegatesfrom national standards and standardizing bodies but alsoby international and regional standardizing organizationsand agencies. Private companies from various sectorsalso are regularly invited to share their experience andconcerns on business operations in different parts of theUN/ECE region.

V. CURRENT ACTIVITIES OF THEUN/ECE WORKING PARTY ONTECHNICAL HARMONIZATION ANDSTANDARDIZATION POLICIES

Among current activities of the Working Party are:preparation of a draft for an international agreement ontechnical harmonization issues; examination of the issueof transposition (i.e. the incorporation of internationalstandards into national standards, i.e. how internationalstandardizing organizations could follow up the national


transposition by its members of the standards developedby these organizations) and use of international standardsin national legislation and regulations and by business op-erators, and examining ways of standardization of testprocedures (namely, elaboration of guidelines for meas-uring procedures).

Furthermore, the Working Party successfully organ-ized an international workshop on the implementationand use of international standards (18 May 1999, Gen-eva), which was widely attended by government dele-gates (35 UN/ECE member States), national standardsbodies, representatives of leading international standardsorganizations (the International Organization for Stand-ardization (ISO), the International Electronical Commis-sion (IEC), the International Organization of LegalMetrology (OIML)), and regional organizations andgroupings (the European Union (EU), the European Com-mittee for Standardization (CEN), the European Commit-tee for Electronical Standardization (CENELEC) and theCommonwealth of Independent States (CIS)) and busi-ness operators from developed and transition economies.Among major proposals raised at the workshop were thefurther development of cooperation between internationalstandards bodies and business operators; commitments bynational standards bodies to implement the results of in-ternational standardization; and the need to increase har-monization of technical regulations at the global levelbased upon the use of international standards.

As a follow-up to the workshop and the subsequentsession of the UN/ECE Working Party on Technical Har-monization and Standardization Policies, an ad hoc Teamof Specialists was established to examine the relationshipbetween international standardization and regulations.This Team will work under the auspices of the WorkingParty. The Team will explore possibilities for reducingnon-tariff barriers to international trade by limiting thecontent of regulations prepared at the national level to theessential requirements for meeting regulatory objectivesand using reference to international standards as the pre-ferred means for setting out detailed requirements.

This publication should help to raise awareness andimprove understanding among regulators, standardizers,business persons and the general public of the complexity


of international standardization issues and the importanceof comparing and contrasting various regulatory and con-formity assessment approaches, with a view to identify-ing best practice and effective strategies, to acceleratingand improving the international standardization processfor the benefit of international trade and promotingefficient resource allocations and increased consumerwelfare.


TRADE-RELATED HARMONIZATION ISSUESAND THE MULTILATERAL TRADING SYSTEMChristina de Vaux2

I. INTRODUCTION

The World Trade Organization (WTO) supports a freeand open multilateral trading system by encouraging itsmember countries to adhere to five core principles. Theseprinciples include the following:

• Non-discrimination, meaning a country should notdiscriminate between domestically produced andimported products, nor between trading partners;

• A decrease in trade barriers;

• Increased confidence by trading partners that they willnot be subject to arbitrary tariffs;

• Increased competition through fair and open trade;

• Special provisions under WTO agreements for devel-oping countries.

To encourage the adoption of these principles, WTOmembers have implemented several agreements gearedtowards eliminating the use of regulations to create tech-nical barriers to trade. Among these are the Agreement onTechnical Barriers to Trade (TBT), the Agreement on theApplication of Sanitary and Phytosanitary Measures(SPS) and other trade-related regulatory issues such asinvestment measures and intellectual property rights.Discussions have also been held on trade-related aspectsof environment and labour standards. In recent years,particular note has been made of the obstacles faced bydeveloping countries and countries in economic transitionin implementing WTO agreements and dealing with theseissues.

2 National Institute of Standards and Technology,Washington, D.C.

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This paper examines provisions of each of the multilat-eral agreements and issues mentioned above, with specif-ic reference to provisions for developing countries andthe impact on countries in economic transition and obsta-cles confronting these countries as they attempt to imple-ment the agreements.

II. AGREEMENT ON TECHNICALBARRIERS TO TRADE

A. TECHNICAL BARRIERS TO TRADE

A technical barrier to trade may take many forms. Themost common TBTs include non-harmonized technicalregulations and standards, duplicative and complex con-formity assessment procedures, a lack of transparency inapplicable laws and technical regulations, certain bureau-cratic procedures, and a lack of operating procedures forprivate standards bodies that is consistent with open trade.As global tariff rates have decreased, there is concern thatincreased regulation is being used to create TBTs in orderto protect domestic industries and block import competi-tion.

In response to this concern and to strengthen the mul-tilateral free trade system by reducing global barriers totrade, WTO members adopted the Agreement on Techni-cal Barriers to Trade in the Uruguay Round of Multilater-al Trade Negotiations, which was concluded in 1994. ByJune 1998, 132 Governments had accepted the obliga-tions of WTO and thus of the TBT Agreement.

B. PRINCIPAL PROVISIONS OFTHE AGREEMENT

Specific provisions under the TBT Agreement pertainto technical regulations, standards, conformity assess-ment practices, notification requirements and standards-developing bodies. These differ from previous provisionsunder the Standards Code, which was adopted during theTokyo Round in 1979.

Key provisions pertaining to technical regulations andstandards include process and production methods relatedtothecharacteristicsof theproduct,asopposedtotheStand-ards Code which only covered manufactured products.

Trade-Related Harmonization Issues and the Multilateral Trading System 15

Specifically, in the area of technical regulations andstandards, the TBT Agreement states that membersshould:

• Ensure national treatment of products, i.e. accord thesame treatment to imported products as that accordedto similar domestically produced goods;

• Accord the same treatment to all similar importedproducts, regardless of origin;

• Ensure that any technical regulations and standardsused to protect human, animal or plant life or health orthe environment are not more trade-restrictive thannecessary;

• Use, in part or in whole, relevant international stand-ards as a basis for technical regulations wheneverpossible;

• Participate in relevant international standards bodiesto develop and adopt appropriate technical regulationsand standards;

• Recognize technical regulations of other members asequivalent provided these regulations meet the objec-tives of their own regulations;

• Emphasize product performance requirements ratherthan design or descriptive requirements;

• Notify other members of proposed technical regula-tions and standards that may significantly affect trade.

Conformity assessment provisions have also been ex-panded from the Standards Code to include not only test-ing and certification programmes but also inspection,registration, laboratory accreditation and quality systemregistration. Specific provisions encourage members to:

• Ensure non-discrimination towards products;

• Restrict the use of conformity assessment procedureswhich create unnecessary obstacles to internationaltrade;

• Use international guides or recommendations pertain-ing to conformity with technical regulations and


standards issued by international standard developingbodies;

• Participate in international standards bodies that de-velop conformity assessment guides and recommen-dations with the goal of harmonizing conformityassessment procedures;

• Notify other members of proposed conformity assess-ment procedures that may significantly affect trade;

• Recognize conformity assessment procedures of othermembers as equivalent provided these proceduresprovide guarantees of health and safety equivalentwith those of their own procedures;

• Allow conformity assessment bodies located in terri-tories of other members to participate as equally inconformity assessment procedures as bodies locatedin their territory or located in the territory of any othercountry.

In addition to the above measures, the TBT Agreementcontains several other important mechanisms aimed at fa-cilitating international trade. Article 10 of the Agreementrequires each member to establish and maintain an en-quiry point. The enquiry point is responsible for respond-ing to all requests from other members pertaining totechnical regulations, standards and conformity assess-ment procedures and for notifying proposed governmen-tal and State technical regulations, standards andconformity assessment procedures that may significantlyaffect trade. The enquiry point also disseminates informa-tion about proposed foreign regulations to interesteddomestic parties.

Annex 3 to the TBT Agreement contains the Code ofGood Practice for the Preparation, Adoption and Applica-tion of Standards. The Code outlines general guidelinesfor the preparation and use of standards by private-sectorstandards bodies. It encourages standards bodies toensure transparency, non-discrimination towards import-ed products, alignment of national standards with interna-tional standards whenever possible and prohibits theimplementing of regulations that may cause barriers tointernational trade. The Code is notable for being the firstagreement to outline a framework of operation for private


standards bodies that is consistent with the practice ofopen trade. With adoption of the Code voluntary, morethan 60 national standards bodies currently adhere to it.

C. PROVISIONS FOR DEVELOPINGCOUNTRIES

The Agreement recognizes the difficulties that devel-oping countries face in complying with its provisions. Itspecifically recognizes that the necessary infrastructure todevelop and implement standards, conformity assessmentprocedures and technical regulations may be underdevel-oped or even non-existent. The Agreement therefore re-quests developed countries to give technical assistance todeveloping countries in any or all of the areas covered bythe provisions. It also states that, in certain circumstances,developing member countries may be excused from ad-hering to the provisions of the Agreement if they havespecial developmental, financial and trade needs.

D. THE COMMITTEE ON TECHNICALBARRIERS TO TRADE

As part of its responsibilities to ensure the full and ef-fective implementation of the Agreement for an openworld economy, the TBT Committee conducts a triennialreview to assess the operation of the Agreement. In itsfirst review, which was submitted in November 1997, theCommittee reported that the degree of country implemen-tation of the Agreement “was not satisfactory”.3

The Committee noted the important role that interna-tional standards play in productive efficiency, interna-tional trade and the transfer of technology fromdeveloped to developing countries. However, it felt thatmember countries do not fully comply with the pro-cedures outlined in the Agreement relating to the devel-opment and use of standards and technical regulations.For instance, many members do not fully participate inthe process of developing international standards. Thismeans that there exist international standards which donot incorporate the interests of all affected parties andmay have an adverse effect on international trade.

3 WTO Committee on TBT—First Triennial Review of the Opera-tion of the Agreement on Technical Barriers to Trade.


Regarding conformity assessment, the Committee re-ported that complex and duplicative conformity assess-ment procedures create costly, unnecessary barriers tointernational trade. It was agreed that the Committeewould research the principle of “one standard, one test”,which would be accepted everywhere in order to helpcountries more easily meet the requirements that othercountries and regional groups impose for market accessfor goods. The Committee was also of the opinion thatinitial steps must be taken to establish confidence in theconformity assessment procedures of other WTO mem-bers by adopting common procedures such as thosespecified in ISO/IEC Guides.

The Committee encouraged national standards devel-oping bodies to adhere to the Code of Good Practice, cit-ing the adverse effects on trade should national bodies notconform to international practices and adopt internationalstandards whenever possible. National standards-devel-oping bodies were also encouraged to play a larger role indeveloping international standards and to coordinate theirinvolvement with other standards-developing bodies intheir particular country and region.

The Committee also recognized that developing coun-tries may face difficulties in complying with the notifica-tion procedures required under the TBT. Issues noted forfuture examination by the Committee include capacity-building, dissemination of knowledge about TBTs, therole of developing countries in international standardsdeveloping bodies and the convening of internationalTBT-related meetings in developing countries.

III. AGREEMENT ON THEAPPLICATION OF SANITARY ANDPHYTOSANITARY MEASURES

A. SANITARY AND PHYTOSANITARYMEASURES

In August 1997, the United States of Americabrought before the WTO Dispute Settlement Board a caseconcerning the European Union’s Council “Directive 81/602/EEC”, Council “Directive 88/146/EEC” and Council


“Directive 88/299/EEC”. The United States claimed thatthese directives violate several international agreements,including the WTO Agreement on the Application ofSanitary and Phytosanitary Measures. The directives pro-hibit the import of meat to which growth-promoting hor-mones have been administered and further prohibit theplacing on the market of meat from such animals; theprocessing of meat from such animals and the placing onthe market of meat products prepared from or with suchmeat. Claiming this was a protectionist measure enactedto block imports, the United States engaged in bilateraldiscussions to resolve the situation. When these effortsfailed, the United States brought the case before theDispute Settlement Board, with Australia, Canada,New Zealand and Norway reserving their rights to par-ticipate in the Panel proceedings as third parties.4

This case illustrates a common fear in the multilateraltrading arena. Sanitary and phytosanitary measures, ow-ing to their highly technical and complex nature, presentan easy and attractive way for countries to restrict im-ports. WTO recognizes that some trade restrictions maybe necessary to adequately protect national food safetyand animal and plant health but such measures should bejustified in accordance with WTO rules. Otherwise, sani-tary and phytosanitary regulations may be used in anunnecessary and unjustifiable manner to protect domesticindustries from import competition.

B. AGREEMENT ON THE APPLICATION OFSANITARY AND PHYTOSANITARY MEASURES

The WTO Agreement on the Application of Sanitaryand Phytosanitary Measures (SPS) addresses the aboveissues. It is a stand-alone Agreement that applies to all do-mestically produced food or local animal and plant pestsand diseases, as well as all imported products. The Agree-ment is based on previous GATT measures enacted to re-strict the use of SPS measures for trade protection. Thefollowing are specific provisions of the Agreement:

4 WTO WT/DS26/R/USA, 18 August 1997, EC Measures Concern-ing Meat and Meat Products (Hormones), Complaint by the UnitedStates, Report of the Panel.


• Members have the right to protect health through theapplication of sanitary and phytosanitary measures,provided these measures are not more trade restrictivethan necessary to ensure an adequate level of healthprotection and provided the measures are based onscientific principles;

• Members should harmonize sanitary and phytosani-tary measures with international standards, guidelinesand recommendations as much as possible;

• Members should participate in relevant internationalstandards organizations which develop sanitary andphytosanitary standards, guidelines and recommenda-tions;

• Members should accept the SPS measures of all othercountries on an equal basis when the exporting coun-tries demonstrate that their measures achieve the levelof health protection required by the importing coun-try;

• Members should develop appropriate risk assessmentmethods as a basis for sanitary and phytosanitarymeasures;

• Members do not have to align sanitary and phytosani-tary measures to international standards should scien-tific evidence indicate that there are health risksentailed should the country do so;

• Members should notify standards and technical regu-lations pertaining to sanitary and phytosanitary goodsto other members;

• Members should observe procedures for control,inspection and approval.

While the SPS Agreement does not prohibit countriesfrom developing and implementing national standardsthat are more stringent than international standards, mem-bers must be aware that if they do not align national re-quirements with international requirements, they willhave to justify their reasons for a more stringent standardif this standard restricts trade. The SPS Agreement spe-cifically notes that there are alternatives to trade barrierswhich also ensure national protection of health. Examplesare quarantining, treatment and increased inspections.


C. PROVISIONS FORDEVELOPING COUNTRIES

By decreasing trade obstruction, the Agreement hasthe potential to benefit consumers and food and agricul-tural product industries in all WTO member countries. Italso has the potential to benefit developing countries evenmore. Like the TBT Agreement, the SPS Agreement con-tains special provisions for developing countries. It rec-ognizes that many developing countries have inadequatefood safety and animal and plant health protection sys-tems. Developed countries are therefore encouraged toassist developing countries in implementing this infra-structure. The Agreement accords developing countriesmore time to meet SPS requirements than developedcountries. In the interim, developing countries’ SPSmeasures do not have to comply with the provisionsdetailed in the SPS Agreement.

Another advantage of the Agreement for developingcountries is the fact that the Agreement is international inscope, meaning that the same SPS measures apply equallyto all countries. No country can be discriminated againstwith regard to sanitary and phytosanitary products basedon other reasons. In addition, the Agreement mandatesthat, regardless of origin, all food and agricultural productsbe accepted for import, as long as the product in questionmeets the safety requirements of the importing country.

D. SANITARY AND PHYTOSANITARYCOMMITTEE

A Sanitary and Phytosanitary Committee has been es-tablished to monitor the implementation of the Agree-ment. It meets twice a year and thus far has undertakenwork on notification requirements, risk assessment pro-cedures and issues pertaining to monitoring the use ofinternational standards.

IV. OTHER TRADE-RELATEDINTERNATIONAL REGULATORYISSUES

Many other trade-related international regulatory is-sues also have the potential to create unnecessary barriers


that may distort trade. These issues affect both developedand developing WTO members and include topics such asenvironment, labour standards, trade-related aspects ofintellectual property rights (TRIPS) and trade-relatedinvestment measures (TRIMs).

A. ENVIRONMENT

WTO transparency provisions ensure that members’environmental and trade policies are implemented in acomplementary way. They also help to ensure that envi-ronmental requirements such as labelling and packagingrequirements do not create unnecessary trade restrictions.However, should the situation arise, WTO members mayplace needs such as regarding the environment, nationalpublic health, or safety, ahead of their WTO obligationnot to implement trade restrictions. In this case, environ-mental measures that incorporate trade provisions mustnot discriminate between domestic goods and imports,nor between different trading partners.

ISO 14001 (the international environmental manage-ment systems requirements standard) is heavily discussedand debated by countries in economic transition. While itis clear that product-related eco-labels and related stand-ards are covered by the TBT Agreement, the position isless clear for environmental management systems. Thequestion as to whether management standards (such asISO 9000 and 14000) or only those standards directly re-lated to products should be covered by the Agreement re-mains subject to internal discussion at WTO. There is asyet no empirical evidence of trade implications arisingfrom the use of the ISO 14000 series of standards.

Trade-related measures permitted for environmentalpurposes include those carried out within the frameworkof multilateral environmental agreements (MEA).Although most MEAs do not contain such environmentalmeasures, the few that do also contain provisions relatingto non-discrimination and transparency. WTO notes thatMEAs provide an effective alternative to trade obstruc-tion in order to achieve multilateral solutions to trans-boundary environmental problems.

The gradual removal of other trade restrictions, spe-cifically tariffs, non-tariff barriers, as well as export andimport restrictions, has fostered hope among both devel-


oped and developing countries that a more open multilat-eral trade system will facilitate the protection of theenvironment and accelerate the progress of sustainabledevelopment efforts.

B. LABOUR STANDARDS

Labour standards refer to core standards governing theway workers are treated. The current body with respon-sibility for labour standards is the International LabourOrganization (ILO). Although WTO is not carrying outany studies on the subject, some WTO members feel thatlabour standards are also an appropriate subject for WTOto examine. Thus far, WTO has for various reasons con-sidered labour rights to be outside its purview.

The first issue concerns the appropriateness of estab-lishing a relationship between trade action and corelabour rights. Some members claim that to do so wouldcreate an excuse for protectionism. A central questionhere is whether countries that are violating workers’rights should be subject to disciplinary trade action. Asecond issue relates to the assertion that countries withlower labour standards have an unfair export advantage,an assertion if proved true could mean that labour stand-ards may indeed be included within the scope of WTO.

Many developed member countries of WTO considerlabour standards an appropriate issue to be discussed inthe forum of WTO. They argue that encouragement fromWTO would provide a powerful incentive for other mem-bers to improve work conditions. Other members feel thatestablishing a link between labour standards and multilat-eral trade negotiations would create an easy justificationfor protectionism. Still other countries feel that the effortto bring discussions about labour standards into WTO isbut a ploy by developed countries to undermine the com-parative advantage of countries, particularly low-wagedeveloping countries, as noted during the WTO Singa-pore Ministerial Conference in 1996.

C. AGREEMENT ON TRADE-RELATEDINVESTMENT MEASURES (TRIMs)

The Agreement on Trade-Related Investment Meas-ures (TRIMs) is an elaboration of GATT recognition that


investment measures may restrict and distort trade. Not-ing that international investment promotes economicgrowth, the Agreement has as objectives the promotion offree trade and the facilitation of international investment.

Similar to the TBT and SPS agreements, the provisionsof the TRIMs Agreement state that:

• National treatment shall be accorded to all products,regardless of origin;

• Members will notify all non-conforming TRIMs, withthe goal of eliminating these TRIMs within a certaintime period;

• Members may apply non-conforming TRIMs to newenterprises during the member’s transition period pro-vided the reason for such an action does not put disad-vantages to the established enterprises which aresubject to the TRIMs and provided the TRIMs areeliminated within the established time-frame;

• Members must ensure that TRIMs are transparent.

The TRIMs Agreement includes a list of examples ofnon-conforming TRIMs. Two examples of non-conform-ing TRIMs are local content requirements and trade-bal-ancing requirements. The time line for elimination ofnon-conforming TRIMs is two years for developed coun-tries, five years for developing countries and seven yearsfor least developed countries.

In addition to stating that developing countries have alonger period of time to eliminate non-conformingTRIMs, it is emphasized that developing member coun-tries gain the most from the Agreement in terms of invest-ment, which will lead to economic growth. In addition, itis recognized that developing countries have specialtrade, development and financial needs that must be takeninto consideration when implementing this Agreement.

D. AGREEMENT ON TRADE-RELATEDASPECTS OF INTELLECTUAL PROPERTY

RIGHTS (TRIPS)

Intellectual property rights are the rights over an indi-vidual’s own creation. The rights belong exclusively to


the individual for a certain period of time. Because ofwidely varying standards and regimes to protect and en-force intellectual property rights, barriers to trade havebeen created in the areas of copyright issues and industrialproperty. Theft and counterfeiting are rampant. TheAgreement on Trade-Related Aspects of IntellectualProperty Rights (TRIPS) builds on the obligations de-rived at the Berne, Paris and Rome conventions. It coversissues pertaining to copyright, trademarks, geographicalindications, industrial designs, patents, licensing prac-tices, protection of undisclosed information and layoutdesigns of integrated circuits. In each of these areas,minimum standards of protection are established.

Similar to other WTO agreements, the Agreementurges members to:

• Respect obligations agreed upon in previous conven-tions;

• Not discriminate between relevant domestically pro-duced and imported products, nor between tradingpartners;

• Protect and enforce intellectual property rights in away that promotes technological innovation, technol-ogy transfer and social and economic welfare;

• Adopt measures to promote public health and welfareand public interest in sectors of socio-economic andtechnological development, as long as those measuresare not in conflict with other provisions of the Agree-ment;

• Ensure that intellectual property rights procedures areapplied in a manner so as not to create barriers totrade;

• Ensure that intellectual property rights are not abusedthereby causing trade to be adversely impacted;

• Ensure that procedures concerning the enforcement ofintellectual property rights are open and fair.

The Agreement includes special provisions for devel-oping countries and some countries in economic transi-tion. While developed member countries have one year tomeet their obligations, developing countries and select


countries in economic transition have five years and leastdeveloped countries have up to eleven years. Countries ineconomic transition that fall into this category are thosewhich are facing problems in preparing and implementingintellectual property laws. These countries must ensurethat any regulations later implemented do not violate theTRIPS Agreement. As in the SPS and TBT agreements,this Agreement requests technical assistance from devel-oped countries to developing countries.

V. THE MULTILATERAL TRADINGSYSTEM AND COUNTRIES INECONOMIC TRANSITION

A country in economic transition to a market systemmay encounter specific obstacles to participating in worldtrade. These obstacles may differ from those encounteredby market-oriented systems. To understand the obstacles,the principal goals of WTO will be revisited. These goalsare, to:

• Ensure non-discrimination;

• Decrease trade barriers;

• Increase confidence by trading partners that they willnot be subject to arbitrary tariffs;

• Increase competition through fair and open trade;

• Ensure that special needs of developing countries areadequately met in provisions of multilateral tradeagreements.

A. BENEFITS FOR COUNTRIES INECONOMIC TRANSITION

Some countries in economic transition are alreadymembers of WTO. Others are currently acceding or con-sidering accession to WTO. WTO emphasizes the impor-tance of transparent trade regimes in facilitating an opentrading system between members. For a country with aneconomy in transition, greater transparency will help de-velop and improve trade relations, attract foreign directinvestment and ensure that once trade reforms are


achieved, they will be maintained in spite of domesticprotectionist impulses. These improvements will, in turn,better enable the countries to complete the transition tomarket systems.

There is debate over whether WTO membership helpsaccelerate this transition and whether a quick transition isbetter than a slow one. Countries undergoing slow re-forms claim that this strategy helps them better financethe high cost of transition, while those undergoing a quicktransition claim they are better able to arrest decliningoutput and set their economies on the road to a stable,market-oriented economy. While there are no definitivecase studies showing that WTO membership has any ef-fect on the rate of the transition process, many countriesin transition believe that membership does accelerate theprocess.

For countries in transition, WTO also provides a forumfor fair trade. The WTO treats all of its members equally,regardless of geographic location or size. This equal treat-ment extends to the dispute-settlement mechanism ofWTO, ensuring that trade disputes are settled in a fairmanner.

B. ENTERING THE MULTILATERALTRADING SYSTEM: DIFFICULTIES

It may be difficult for some countries in transition tomeet the goals of WTO. These countries, therefore, needto consider carefully the requirements they must meet asmembers of WTO. The TBT and SPS agreements containsix core common provisions:

• Measures to protect human or plant and animal life orhealth or the environment are allowed so long as thesemeasures are not more trade-restrictive than neces-sary;

• Non-discrimination;

• Acceptance of the trade and SPS measures of othermembers so long as they meet the objectives of theimporting country;


• Alignment of technical regulations with internationalregulations and participation in international stand-ards developing bodies;

• Transparency of technical regulations;

• Special measures for developing countries.

To achieve these goals, the countries in transition mustmake several changes. They need to develop and maintainsound regulatory, legislative, enforcement and institu-tional frameworks. A regulatory regime that comprisescomplex or badly implemented regulations, will obstructeconomic growth, competitiveness, foreign investmentand job creation and will raise administrative costs. Onthe other hand, regulations that are properly constructedand implemented can help create competitive marketeconomies and raise living standards.

It can be difficult for countries in economic transitionto develop and implement sound regulatory regimes. Oneobstacle is their limited access to pertinent informationand technical expertise. When drafting legislation relatedto regulatory reform, many countries find themselveslacking adequate sources of information and expertiseabout current regulatory issues and thus draft inappropri-ate or ineffective legislation. Another problem is enforce-ment. Even if properly drafted legislation is in place,these countries may not have the necessary infrastructureto enforce such legislation. For this they will requireinvestment in institutions, equipment, personnel andtraining.

C. DIFFICULTIES FACED BY COUNTRIES INECONOMIC TRANSITION IN ENTERING THE

MULTILATERAL TRADING SYSTEM

1. Agreement on Technical Barriers to Trade

The central tenet of the TBT Agreement is to decreasetrade barriers and the various distortions that they bring.When the barriers are decreased in an effective manner,this has a twofold effect on countries in economic transi-tion. First, exposure to international competition forceschanges in the domestic production systems and regula-tions, thereby increasing the efficiency of domestic pro-ducers. Secondly, the depth of trade-policy reform helps


influence the scope and rate of other structural changesbeing implemented. It has been suggested by both devel-oping countries and countries in transition that some ofthe most effective ways for countries in transition to fur-ther their participation in the multilateral trading systemare by:

• Ensuring consistency between trade and macroeco-nomic policies;

• Considering use of trade-policy mechanisms for non-trade objectives if necessary (such as collecting rev-enue);

• Consider using WTO-monitored import taxation as ameans of addressing balance-of-payments problemsresulting from difficulties faced by economies in tran-sition in accessing markets of developed countries.

In terms of TBT requirements concerning participationin bodies that develop international standards, severalcountries have pointed out that the situation of developingcountries and of countries in economic transition differsfrom that of developed countries. Less developed coun-tries often do not have the funding to participate in theseactivities. They argue that because of this internationalstandards are based on the needs of technologically devel-oped countries. They go on to state that countries whichcannot participate in the development of standards arealso unlikely to have the means to comply with thosestandards, either financially or technologically.

Developing countries and countries in transition note,for instance, the potentially high expenditure associatedwith putting in place conformity assessment infrastruc-tures that will enable them to certify locally producedproducts to meet international requirements. Many coun-tries do not have operational accreditation infrastructuresthat could provide a basis for the recognition of test re-sults and certificates in foreign markets. They also lackthe funds required to purchase the necessary equipment.An even more significant problem in some countries isthe lack of trained personnel.

2. Agreement on the Application of Sanitary and Phyto-sanitary Measures


The SPS Agreement deals with domestic and importedfood or local animal and plant pests and diseases. It hasgenerally been agreed that this Agreement marks thebeginning of a turning away from government controlover these goods and will gradually allow a more market-controlled system. For countries in economic transition,current exports in goods regulated by SPS measures havebeen disappointing owing to the products’ inability tomeet the sanitary and quality standards required in desti-nation countries. This decrease in international trade,coupled with factors such as low productivity and highinput costs present in the agricultural industry, helps toillustrate why domestic producers often cannot afford tobuy the base agricultural products with which to make afinished good, even though they may have the technologyand training to do so. These base materials are oftenexported to be made into a finished product which is thenimported back into the country.

These obstacles can be resolved if effective SPS meas-ures are implemented. As with trade policies, internation-al competition will force the restructuring of resourcesand agricultural policies. To help create the appropriatelegal and institutional framework and to train personnel,assistance is provided under the SPS Agreement bydeveloped countries.

3. Environment

Countries in transition recognize that environmentalissues cannot be ignored in the privatization process.They also recognize that in the light of WTO agreements,they should not implement policies that are more trade re-strictive than necessary while attempting to protect theenvironment. In addition, investment is needed to developenvironmental policies and risk assessment methods inorder to better address pollution control and conservation.

There are two key ways in which countries in econom-ic transition are seeking to resolve the question of envi-ronmental investment. First, the provisions of theinternational agreements mentioned in this paper call fortechnical assistance for developing countries. Countriesin economic transition could use this assistance to provideenvironmental facilities, equipment, personnel and train-ing. This assistance could also be provided in the form of


loans by international financial institutions. The secondway for these countries to address environmental con-cerns has been to earmark revenues derived from othermeans for environmental improvements. However, it isoften difficult to collect the pollution charges and otherfees that serve as the main source of revenues for thesefunds. In addition, there may be numerous bureaucraticdifficulties involved in the management of environmentalfunds.

4. Labour standards

In terms of labour standards, many countries in eco-nomic transition currently lack proper mechanisms to en-force labour laws. In addition, many labour laws are notcomplementary with current social policies, such as re-tirement incentives. Countries in transition need to createmore employment (but with a different allocation of la-bour resources among different industries) if they are torestructure effectively and to maintain non-inflationarygrowth. To do so, they have begun investing in their la-bour forces by providing services such as training and jobplacement.

These countries also need to develop effective mecha-nisms for enforcing labour standards. While many havebegun restructuring their enforcement mechanisms, oth-ers have not yet done so to any significant extent. Withthis in mind, many countries in transition argue that it isinappropriate to link labour standards to trade action atthis time. To do so may enable other countries to use la-bour issues as a shield for protectionism which coulddamage the trade, and hence the output, of countries ineconomic transition.

5. Agreement on Trade-Related Investment Measures

The TRIMs Agreement cites international investmentas an engine of growth. To attract investment, there mustbe confidence in the country’s economic stability. Thecountries must therefore implement reforms in the finan-cial sector. The banking system and capital markets mustbe strengthened, inflation must be curbed and the current-account deficit stabilized. Enterprises which are stillState-owned must be privatized and the countries musteliminate all non-conforming TRIMs.


6. Agreement on Trade-Related Aspects of IntellectualProperty Rights

The TRIPS Agreement presents a special challenge forcountries in transition. Theft and counterfeiting of intel-lectual property are widespread throughout the world butespecially in developing countries and countries in eco-nomic transition. Technologically advanced countries areputting heavy pressure on developing countries and coun-tries in transition to develop and enforce intellectual prop-erty rights procedures. However, as with the other WTOagreements, countries in transition may lack the neces-sary infrastructure to adequately monitor intellectualproperty rights. Another disadvantage is that costs of en-forcement may be higher. Lastly, the fact that much of theviolation of intellectual property rights takes place under-ground or on the black market makes violations extreme-ly difficult to monitor. Countries in economic transitionwill therefore need to develop a sound regulatory and leg-islative framework to enforce intellectual property rights.One advantage for these countries is that a number ofreviews of countries already meeting their TRIPS obliga-tions have been carried out. The results of these reviewsserve as models for countries seeking to implement theirown intellectual property rights legislation.

VI. CONCLUSION

To achieve a multilateral trading system that offers fairtrade to all its members and promotes economic growth,one has to overcome several barriers. Potential barriers totrade include standards, technical regulations, conformityassessment procedures, sanitary and phytosanitary meas-ures, environmental issues, labour standards, trade-relat-ed investment measures, as well as trade-related aspectsof intellectual property rights. This paper has examinedprovisions of some of the discussions and multilateralagreements addressing these barriers, with specific men-tion made of the difficulties faced by countries in eco-nomic transition that are members of WTO or that mayaccede to WTO in the future as they attempt to meet therequirements of the agreements. Overall, most countriesin economic transition will need to restructure their insti-tutional, legislative and regulatory frameworks, as well as


to invest in human resources and equipment in order toenter effectively the world market. Developed countriescan help in these matters through financial investmentand through technical assistance.

WTO has already reviewed some of the agreements foreffectiveness and has mechanisms in place to review mostof the other areas mentioned. All the agreements and dis-cussions share one common characteristic. They all con-tain the underlying theme that one day the global marketplace will become a true global market place where allproducers can sell their goods without fear of encounter-ing trade discrimination or restrictions.

The Role of Technical Harmonization in Regional Integration 35

THE ROLE OF TECHNICAL HARMONIZATIONIN REGIONAL INTEGRATIONChristina de Vaux5

I. INTRODUCTION

Recent years have witnessed concerted efforts to liber-alize and harmonize international trade. Through imple-menting trade agreements, the World Trade Organization(WTO) has become a driving force in this process by en-couraging its members to offer tariff concessions, liberal-ize quotas and remove other trade restrictions, includingnon-tariff barriers. The institutional framework to do thishas been provided by organizations that have helped es-tablish trade policies and provide a strong impetus totrade liberalization. Internationally, these include thepredecessor to WTO, the General Agreement on Tariffsand Trade (GATT), and the United Nations Conferenceon Trade and Development (UNCTAD). Regionally, theyconsist of customs unions, free-trade areas and organiza-tions that promote regional technical harmonizationactivities.

The regional groups considered in this paper are theEuropean Union, the European Free Trade Association,the European Economic Area, Asia-Pacific EconomicCooperation, North American Free Trade Agreement,Pan American Standards Commission, Organisation forEconomic Co-operation and Development (OECD), Afri-can Regional Organization for Standardization (ARSO)and Interstate Council for Standardization, Metrology andCertification in the Commonwealth of Independent States(CIS). The reasons behind the integration of each of thesegroups are numerous. In many cases, one of the principalreasons is that of technical harmonization. This paper willexamine the role played by various entities and regionalgroups dealing with technical harmonization in encourag-

5National Institute of Standards and Technology, Washington, D.C.

35


ing regional integration. Additional attention will be de-voted to the current objectives and activities regardingtechnical harmonization of each group. Reference willalso be made to historical antecedents to regional organi-zations.

II. EUROPEAN UNION

The European Economic Community (EEC) was es-tablished in 1958 with the ultimate goal of creating “anever closer union among the peoples of Europe”. By1986, the EEC included 12 member countries. In 1998,the now 15 member countries of the European Union(EU) represent the largest market in the world. The origi-nal goal of the group was to promote political integrationthrough economic unity. Although political integrationhas not yet become a reality, progress in achieving eco-nomic unity has made much more significant strides. EUmember countries have established a customs union, inwhich all tariffs and quotas for internal trade have beenabolished and a common external tariff has been estab-lished.

Recognizing that technical harmonization within theregion and on an international level can promote econom-ic growth, the EU developed a “New Approach” to tech-nical harmonization. The goal is to streamline technicalharmonization and the development of standards for cer-tain product groups. Under the New Approach, directivesfor the harmonization of standards by member States arelimited to essential safety or other performance require-ments in the general public interest. The technical detailsof how to meet these requirements are left to manufactur-ers who self-certify products. The three principal organi-zations that oversee technical harmonization activities inthe EU are the European Committee for Standardization,the European Committee for Electrotechnical Standardi-zation and the European Telecommunications StandardsInstitute.

The European Commission has also developed a poli-cy on harmonized rules and procedures for conformityassessment called “The Global Approach to Certificationand Testing”. The aim is to establish conditions to imple-ment the mutual recognition agreements (MRAs). Thiswill allow for a notified body’s test results to be recog-


nized by all EU member States or test results to be accept-ed between two Governments.

A. EUROPEAN COMMITTEE FORSTANDARDIZATION

Established in 1961, the European Committee forStandardization (CEN) is responsible for creating volun-tary European standards in all areas except electrotechni-cal and telecommunications. CEN’s aim is to eliminatetrade barriers resulting from differing national technicalstandards in order to stimulate industry and trade and pro-mote safety and efficiency through creating and harmo-nizing European standards.

CEN’s primary areas of activity are in:

• Mechanical engineering

• Building and civil engineering

• Health technology

• Information technology

• Biology and biotechnology

• Quality

• Certification and testing

• Environment

• Workplace health and safety

• Gas and other energies

• Transport and packaging

• Consumer goods

• Sports and leisure

• Food

• Materials (iron and steel)

• Chemistry.


B. EUROPEAN COMMITTEE FORELECTROTECHNICAL STANDARDIZATION

The European Committee for Electrotechnical Stand-ardization (CENELEC) is an international associationestablished in 1972. Its goal is to produce a single set ofharmonized electrotechnical standards in Europe, includ-ing ones that support EU directives. CENELEC developsstandards in the field of electrotechnical and electronicengineering where no International ElectrotechnicalCommission (IEC) standards are available. It also aims toexpedite the publication and adoption of internationalstandards. CENELEC works very closely with the IECand maintains an open exchange of information.

C. EUROPEAN TELECOMMUNICATIONSSTANDARDS INSTITUTE

The mission of the European TelecommunicationsStandards Institute (ETSI) is to create telecommunica-tions standards for improving communications betweenthe member States of the EU. Established in 1988, ETSIis currently one of the largest international technicalassociations in the field of telecommunications. ETSIdevelops standards relating to public and private telecom-munications systems and equipment, local area networks,and other electronics equipment for Governments andconsumers.

III. EUROPEAN FREE TRADEASSOCIATION6

The European Free Trade Association (EFTA) wasoriginally conceived in 1960 as a free trade area formanufactured goods with special provisions for trade infarm products. Unlike the EEC, EFTA’s seven originalmember States did not adopt a common external tariff butwere instead free to determine their own trade policiestowards external countries.

6 This section is based on a contribution by Mr. Patrick Burkhalter ofthe EFTA Secretariat in Brussels.


Owing to the enlargements of the EU, Iceland, Liech-tenstein, Norway and Switzerland remained the membercountries of EFTA in 1998. EFTA’s objective is to re-move trade barriers among its member countries and tosupport non-discriminatory practices in world trade.Members are guided by the principles outlined in theStockholm Convention. The primary goal is to eliminateimport duties and quantitative restrictions on trade inmanufactured goods. The internal trade system is basedon rules of origin and agreements between the nationalcustoms authorities. The Convention also provided gen-eral principles in areas such as State aid, public procure-ment and restrictive business practices (competition) soas not to jeopardize the internal liberal trade regime.

The EFTA Committee on Technical Barriers to Tradeoversees notifications on technical regulations and pro-vides a forum for cooperation with the goal of facilitatingtrade by technical and legislative means. In addition,there are ongoing contacts with the EU and its standardi-zation bodies CEN, CENELEC and ETSI in order to pre-pare European standards. This type of cooperation isfurther reinforced as three EFTA countries take part in theEuropean Economic Area (EEA).

IV. EUROPEAN ECONOMIC AREA7

The internal market of the EU was extended to Iceland,Liechtenstein and Norway on 1 January 1994 when theEEA entered into force.8 The EEA provides for an eco-nomic area with a free movement of manufactured goods,services, capital and persons. This area covers 18 coun-tries with over 380 million consumers and is the largestsingle market in the world.

The EEA is based on the concept of homogeneity. Themember countries offer identical rules and conditions forcompetition to the firms that are internal residents. Tomaintain homogeneity, the EEA Agreement can be con-tinuously amended in order to ensure that the relevant EU

7 This section is based on a contribution by Mr. Patrick Burkhalterof the EFTA Secretariat in Brussels.

8 Voters in Switzerland rejected participation in the EEA in Decem-ber 1992.


competition-related legislation is integrated into the na-tional legislation of the three EFTA countries in the EEA.These three EFTA countries take part regularly in the EUexpert group meetings when they develop EU legislationthat is relevant to the EEA. In addition, the three EFTAcountries are in the process of concluding parallel mutualrecognition agreements (MRAs) in the conformity assess-ment with the same third countries with which the EUconcluded such agreements.

The implementation of the common rules throughoutthe EEA is surveyed by the European Commission in the15 EU countries, while the same authority is granted tothe EFTA Surveillance Authority for the three EFTAcountries. Judicial powers are accorded to the EFTACourt in Luxembourg.

V. ASIA-PACIFIC ECONOMICCOOPERATION

The Asia-Pacific Economic Cooperation was estab-lished in 1989 in response to the growing interdepend-ence among Asia-Pacific economies. Begun as aninformal dialogue group, APEC has since become the pri-mary regional mechanism for promoting open trade andeconomic cooperation. APEC now includes all the majoreconomies in the region, as well as some of the most dy-namic economies in the world. In 1995, APEC’s 18 mem-ber countries had a combined gross domestic product ofover US$ 13 trillion. This represents approximately 55per cent of total world income and 46 per cent of globaltrade.

Leaders of APEC economies initially recognized thatby supporting an open, international trading system andthe reduction of trade and investment barriers they wouldshare the benefits of economic growth through higherincomes and free-flowing goods, services, capital andinvestment. One of APEC’s key objectives, therefore,was to develop an appropriate technical infrastructure thatwould, in turn, encourage harmonization of technicalrequirements.


The principal goal of APEC’s Subcommittee on Stand-ards and Conformity Assessment of the Committee onTrade and Investment is to enhance trade between Asia-Pacific member countries by reducing standards-relatedtechnical barriers and by building an appropriate infra-structure for facilitating trade. The priority areas targetedfor technical infrastructure development and harmoniza-tion include:

• National standards for physical measurement and anetwork of accredited calibration laboratories withtraceability to primary standards;

• A network of accredited testing and measurementlaboratories;

• Accreditation of quality system certifiers;

• Accreditation of inspection bodies and certification ofinspection personnel.

In 1995, the Subcommittee made a policy decision torely on specialist regional bodies to develop the technicalinfrastructure within the region rather than create newbodies. These bodies include the following: the PacificArea Standards Congress (PASC); the Asia-Pacific Labo-ratory Accreditation Cooperation (APLAC); the Asia-Pacific Legal Metrology Forum (APLMF); the Asia-Pacific Metrology Program (APMP); and the PacificAccreditation Cooperation (PAC).

Pacific Area Standards Congress

PASC assists national standards developers by sharingof technical input for international standards develop-ment. Members of PASC coordinate regional input re-garding standards development for technical groups thatreport to the International Organization for Standardiza-tion and the International Electrotechnical Commission.

Asia-Pacific Laboratory Accreditation Cooperation

APLAC is a group of more that 25 laboratory accredi-tation bodies in 18 Asia-Pacific economies. Its membersrecently signed an MRA to recognize accreditation in thefields of testing and calibration. The MRA is expected toenhance confidence in the procedures of member ac-creditation bodies, thereby paving the way for increased


regional and international trade. Under the MRA, a prod-uct tested by a laboratory accredited by a member bodyneed not be retested in another member’s country.

Asia-Pacific Legal Metrology Forum

The APLMF seeks to promote trade through harmo-nizing legal metrology regulations in the region under theInternational Organization of Legal Metrology and to or-ganize the infrastructure of legal metrology in its membercountries.

Asia-Pacific Metrology Program

Current activities of the APMP include comparisonstudies of chemical measurement capabilities, the resultsof which will be compiled with other regions’ studies, in-cluding those of the North American Metrology Agree-ment.

Pacific Accreditation Cooperation

PAC seeks to promote the worldwide acceptance ofcertificates of conformity issued by certification bodiesaccredited by PAC members. To accomplish this, PAC isseeking to establish a multilateral MRA between accredi-tation body members of PAC.

Future goals of APEC include:

• To reduce the negative efforts on trade and investmentflows in the region due to differing standards and con-formance arrangements;

• To foster and promote international standardizationwhich would stimulate trade through active participa-tion by APEC members in the development of interna-tional standards and conformity assessment practices;

• To facilitate the further development of open, mar-ket-driven interdependence in the Asia-Pacific region,while making the most efficient possible use of avail-able resources, by encouraging greater alignment ofmembers’ standards with international standards;

• Liaising more closely and developing greater consist-ency of approach to standards and conformance issuesin relevant international bodies;


• Making progress on developing mutual recognition ofconformity assessment in the region.

VI. NORTH AMERICAN FREE TRADEAGREEMENT

Signed in December 1992, the North American FreeTrade Agreement (NAFTA) created the largest free tradearea in the world, a duty-free zone with economic outputexceeding US$ 8 trillion and nearly 400 million consum-ers. NAFTA is an agreement that attempts to eliminatetariffs and also removes many of the non-tariff barriersand other trade-distorting restrictions. The Agreement isbased on the previous Canada-US Free Trade Area, al-though coverage under NAFTA has been expanded toinclude issues relating to intellectual property rights,transportation services and rules against investment dis-tortion. In the area of standards, it specifically requiresthat standards-related measures be applied in a non-dis-criminatory manner to both domestically produced andimported products. The standards development process ofNAFTA members is supposed to be open and transparent.

NAFTA also recognizes the crucial role of standardsand technical regulations in promoting safety and protect-ing the environment and consumers and human, animaland plant life and health. It provides a framework of rulesand cooperative mechanisms for enhancement and com-patibility of such measures and ensures that these mecha-nisms do not operate as unnecessary barriers to tradewithin the free trade area.

Specific objectives of NAFTA include the following:

• Elimination of barriers to trade in goods and servicesbetween members;

• Facilitation of the cross-border movement of goodsand services between members;

• Promotion of conditions of fair competition in the freetrade area;

• Enhancement of investment opportunities in membercountries;


• Provision of an adequate and effective protection andenforcement of each member’s intellectual propertyrights;

• Creation of effective procedures for the implementa-tion and application of NAFTA and for its jointadministration and the resolution of disputes;

• Establishment of a framework for further trilateral,regional and multilateral cooperation to expand andenhance the benefits of the Agreement.

VII. PAN AMERICAN STANDARDSCOMMISSION

The Pan American Standards Commission was origi-nally formed in 1961 as the Pan American TechnicalStandards Committee (COPANT). It was created becauseof the recognition that each country should have a stand-ardization agency and that there should be one groupresponsible for coordinating the standards activities ofthose agencies.

One of the primary objectives of COPANT is to pro-mote the development of technical standardization andrelated activities with the aim of promoting industrial,scientific and technological development in its membercountries.

Specific goals of COPANT are to:

• Devise standards of interest to countries in the regionthat have not been developed by recognized interna-tional agencies or, if so, do not correspond to their par-ticular needs;

• Encourage coordination among COPANT members tofacilitate harmonization of their technical standards;

• Ensure increased utilization and application of inter-national standards in business and industry;

• Represent COPANT members in other internationalforums with similar goals or in regional and interna-tional organizations requiring technical standardiza-


tion support to fulfil their economic, scientific ortechnological functions;

• Encourage and facilitate an exchange of informationbetween COPANT members and the internationalsystem;

• Promote technical education and training in standard-ization areas and in related activities;

• Encourage the development of certification systemsbased on international criteria;

• Promote the harmonization of certification systems;

• Ensure the harmonization of policies and technicalpositions of member institutes with international poli-cies and technical positions.

Further objectives of COPANT include:

• Achieve greater participation in ISO and the IECwhen such efforts correspond to explicit needs of theregion;

• Encourage the development and adoption of relevantinternational standards;

• Implement all standardization work already accom-plished;

• Maintain relationships with the international andregional bodies whose activities are related to the useof Pan American standards.

VIII. ORGANISATION FORECONOMIC CO-OPERATIONAND DEVELOPMENT

The precursor to the Organisation for Economic Co-operation and Development (OECD) was the Organiza-tion for European Economic Cooperation (OEEC) whichwas established in 1948 to coordinate European recon-struction plans and distribute aid from the Marshall Planto recipient European countries. When the reconstructionwas complete, the Governments concerned decided to use


the OEEC as a mechanism to help integrate their econo-mies into the rapidly growing international trade system.The OEEC was renamed OECD in 1960.

OECD promotes policies designed to:

• Achieve the highest sustainable economic growth andemployment and a rising standard of living in membercountries, while maintaining financial stability, thuscontributing to the development of the world eco-nomy;

• Contribute to sound economic expansion in memberand non-member countries in the process of economicdevelopment;

• Contribute to the expansion of world trade on a multi-lateral, non-discriminatory basis in accordance withinternational obligations;

• Evaluate issues which affect economic and socialpolicy, such as agriculture, environment, education,trade and foreign investment;

• Facilitate domestic policy-making and more coordi-nated international practices;

• Enhance transparency among members.

One priority area identified for action by OECD mem-bers is that of regulatory reform. OECD provides policyadvice to members undertaking reform projects. Reformis supposed to improve the quality and efficiency of regu-lations. This often includes improvements in the regula-tion-creation process as well. The outcomes of regulatoryreform include enhanced competition, increased ability ofcountries to adapt to change and remain competitive inglobal markets and increased efficiency.

OECD advocates the use of harmonized standards.When harmonization with international standards iscarried out effectively, multiple and duplicative regula-tory requirements can be overcome. In addition, OECDaddresses the health and safety aspects of imported prod-ucts through the effective design and monitoring ofconformity assessment procedures.


IX. AFRICAN REGIONAL ORGANIZATIONFOR STANDARDIZATION

Established in 1977, the African Regional Organiza-tion for Standardization (ARSO) currently has 23 mem-bers. The Organization has five principal objectives:

• To promote and coordinate standardization, qualitycontrol, certification marking and metrology practicesin Africa;

• To develop African regional standards for products ofinterest to Africa;

• To promote social, industrial and economic develop-ment and provide consumer protection and humansafety by advocating and establishing activities con-cerning standardization in Africa;

• To operate as a regional clearing house for informa-tion on standards and technical regulations;

• To promote the harmonization of the views of mem-bers and promote their contribution and participationat the international level in the field of standardizationand related activities.

ARSO develops African regional standards in the fol-lowing nine areas: general standards, agriculture and foodproducts, building and civil engineering, mechanicalengineering and metallurgy, chemistry and chemicalengineering, electrotechnology, textiles, transport andcommunications, environmental protection and pollutioncontrol. ARSO also organizes training programmes forpersonnel of member States engaged in standardizationwork and operates a network of documentation and infor-mation systems on standards and technical regulations inAfrica.

ARSO is currently adopting a regional certificationmarking scheme to assure the quality of African products.The scheme would include a regional laboratory accredi-tation programme. It plans to begin a regional metrologyprogramme aimed at improving the measurement capa-bilities of member States and sharing of metrology facil-ities through a network of testing, metrology, andinstrumentation centres.


X. INTERSTATE COUNCIL FORSTANDARDIZATION, METROLOGYAND CERTIFICATION

Founded in 1992, the Interstate Council for Standardi-zation, Metrology and Certification (ISC) is composed of12 heads of national standards, metrology and certifica-tion bodies within the Commonwealth of IndependentStates. The principal goals of the Council are to:

• Define rules for inter-State standardization work;

• Define general technical standards and requirements;

• Define mandatory requirements pertaining to qualityof products, processes and services of inter-Stateapplication;

• Define uniform methods of testing products;

• Define units of physical quantities for inter-Stateapplication, physical constants and standard referencematerials;

• Define uniform requirements for protection of theenvironment.

The Council is also responsible for the following:

• Developing, storing and maintaining the archive ofinter-State, international and regional standards, aswell as national standards of foreign countries. TheCouncil also serves as a source of information aboutthose standards for member States (the archives of theCouncil’s inter-State standards contains more than19,000 normative documents; 30-60 per cent of thoseare sector-specific and meet international norms andrequirements; more than 2,900 normative documentswere developed and revised during 1993-1997);

• Undertaking international cooperation in standards,metrology, certification and quality;

• Maintaining and evolving measurement standards andtraceability;


• Maintenance of databases on measuring instruments,standard reference materials and standard referencedata on properties of substances and materials;

• Developing the rules and procedures for the mutualrecognition of accredited testing, calibration andmeasurement laboratories, certification bodies, prod-uct certificates and quality systems.

XI. CONCLUSION

One may conclude that the regional groups will con-tinue to serve as a means for countries to better attain thegoals advocated by WTO; principally, the goal todecrease trade barriers and to increase competitionthrough fair and open international trade regimes.

Integration of Countries in Economic Transition into the Multilateral Trading System 51

INTEGRATION OF COUNTRIES IN ECONOMICTRANSITION INTO THE MULTILATERAL TRADING SYSTEMIvar Foss9

I. INTRODUCTION

The present paper deals with the integration of coun-tries in economic transition into the multilateral tradingsystem. Special attention is devoted to the Common-wealth of Independent States and to the entry into theWorld Trade Organization (WTO). The countries in tran-sition, as referred to in this paper, are the central and east-ern European countries which were previously membersor linked to the Council for Mutual Economic Assistance(CMEA). Following the political and economic upheav-als, the dissolution of the Soviet Union, Czechoslovakiaand the former Yugoslavia, these countries are goingthrough a rapid and fundamental change to a market sys-tem, involving a complete overhaul of the legislation,technical regulations, standards and conformity assess-ment procedures that relate to trade.

With this in mind, the national objectives of all thesecountries are:

• To protect society against the harmful effects of prod-ucts or activities, including health, safety and the en-vironment (this concerns domestic products andactivities, as well as imported products);

• To increase and facilitate trade with other countriesand regional trading blocs.

In relation to various trading groups and internationalassociations, countries in economic transition are in dif-ferent positions. For analytical purposes of this paper,central and eastern European countries can be dividedinto three groups:

51

9 Ivar Foss Quality Management, Oslo, with contributions from Ser-guei Kouzmine, UN/ECE secretariat, Geneva.


• Countries with European Union (EU) associationagreements;

• Countries with other types of arrangement with theEU;

• Countries aspiring to become members of WTO.

Most of the republics of the former Soviet Union are inthe process of becoming members of WTO. Three BalticStates (Estonia, Latvia and Lithuania) are aiming at ac-cession to the EU, although only Estonia was invited bythe EU to start entry negotiations in 1998. Ten central andeastern European countries have association agreementswith the EU and expect to join in the future. However, theEU invited in 1997 only the Czech Republic, Estonia,Hungary, Poland and Slovenia to start entry negotiationsin March 1998.

The basic principles for trade within the SingleEuropean Market are in line with the requirements set outin the WTO Agreement on Technical Barriers to Trade.However, the reference documents and practical imple-mentation are different.

II. TECHNICAL REGULATIONS,STANDARDIZATION ANDCONFORMITY ASSESSMENT INCENTRAL AND EASTERN EUROPE:THE OLD SYSTEM

A. CENTRAL PLANNING

Central and eastern European countries used to be eco-nomically tied through the CMEA. The demise of thecentral planning system left these countries in a certainvacuum. They also faced the mammoth task of reorient-ing their economies.

Estonia, Latvia, Lithuania and most of the central andeastern European countries outside the former Soviet Un-ion chose to orient themselves primarily towards westernEurope and the international market. Other former Sovietrepublics developed independently of existing trade


groupings, with the Russian Federation as a leading play-er in the Commonwealth of Independent States. This pa-per is devoted to the conditions in the Russian Federationand Ukraine, which are the two largest economies in theregion of the former Soviet Union. With a population of148 million in the Russian Federation and 51 million inUkraine, these two countries together make up about 72per cent of the population of the Commonwealth of Inde-pendent States.

In the former Soviet Union there were 22,000 manda-tory State standards and about 20,000 sectoral standardsdealing with areas such as raw materials, technical speci-fications, quality, testing and other aspects for particularproducts/commodity groups. Competition betweenmanufacturers for export markets hardly existed. Eachcompany was instructed in advance what it had to make,it knew who its customers were, and customers had a lim-ited, if any, choice of suppliers.

There was little direct contact between customer andsupplier. Product specifications were to a large extentbased on public, mandatory standards. In many cases,manufacturing companies were monopolies. Within thissystem, manufacturers had little incentive to improveproduct quality or reduce unit costs of production. Ifimprovements took place, that could mean upward revi-sion of future planning targets or reduction in budgets,corresponding to the improvement made. Product designand development were often carried out separately inscientific institutes. The manufacturer was simply in-structed to manufacture the resulting product. This sepa-ration of functions meant that State enterprises had verylimited in-house design and development capability andfurther reduced the possibility for communication of cus-tomer needs to those developing the product or manu-facturing it.

On the positive side of the centrally planned system,the sheer size of each industry meant the creation of alarge and technologically diverse industrial structureacross the CMEA. In addition, a considerable scientificand engineering base encouraged by the planning systemfor certain industries permitted the development of highlyspecialized human capital. Certain successful enterpriseswere able to compete and to sell on the world markets,


especially in developing countries that were unable toafford more sophisticated Western goods and equipment.Some of this success, however, can be attributed to theexporters’ status as subsidized State enterprises.

B. REGULATORY SYSTEM

The implementation of standards in centrally con-trolled countries was an important policy measure. Stand-ards were not only intended to serve technical andeconomic interests but also to serve as legal instrumentsof State policy. All standards had a legal status and had tobe adhered to, and a complex legal apparatus was devel-oped to enforce the system. It was based on four catego-ries of laws pertaining to standardization:

• Administrative laws, to define the competence ofstandards bodies, to prescribe procedures for thepreparation of standards and to adopt programmes andplans for standardization;

• Civil laws, to regulate the use of standards in trade andindustry, covering guarantees for conformity, deliveryconditions and action to be taken in cases of non-conformance;

• Labour laws, to deal with savings of material andmanpower resources and appropriate timing for theintroduction of new standards;

• Penal laws, to prescribe the responsibilities of theofficials concerned with the implementation of stand-ards and the penalties that might be imposed in case ofnon-observance.

The comprehensive character of this apparatus demon-strates the importance that was attached to standardiza-tion. The rigid adherence to standards, where all means ofproduction and distribution of goods and services weresubject to central control, was supposed to improve thequality and performance of products. The Soviet Unionwas the first country in the world to elevate its nationalstandards body to full ministerial rank so that it was nolonger dependent on other governmental organs and exer-cised direct responsibility for enforcing compliance withthem. This Soviet decision reinforced the power of stand-


ardization bodies in other countries with a similareconomic system.

Responsibility for metrology, certification, quality andmarket surveillance was also given to the national stand-ardization body. All these activities were centrally fundedby the State budget. In those days, Gosstandart had a staffof 1,000 in Moscow and 125,000 in the entire SovietUnion.

The transition of the Russian Federation towards amarket-type economy has resulted in the incapability ofthe central Government to finance these services on thescale that existed prior to the reform process. As a result,testing and certification centres have to earn up to 80 percent of their income by charging for their services.

In the Russian Federation, Gosstandart remains thefederal authority for standards, certification, metrologyand consumer protection. However, other ministries,State committees and organizations have their own ap-proach regarding the institutional framework. In 1992,Russian authorities communicated through the GATT in-formation system that a new law on the safety of consum-er products had been adopted and imposed in January1993. Mandatory certification of products was covered byits scope. As a result of pressure from EFTA countriesand the European Commission, the implementation of thelaw was postponed to 1 January 1994. The law is wide inscope and leaves considerable power of interpretation.

In the context of the Russian programme for accessionto the WTO Agreement on Technical Barriers to Trade(TBT), several aspects of the Russian procedures may bedifficult to justify under future TBT obligations:

• Lack of transparency of requirements and standards,and varying or arbitrary fees for certification;

• Discrimination between different suppliers as export-ers complain that some suppliers receive more favour-able treatment or face simpler conformity assessmentprocedures than others;

• Excessive use of third-party certification proceduresand multiple certification requirements for sectors andrisks which could be regulated more lightly (the rules


failed the test of proportionality, and could also be in-consistent with the requirement to use internationaladopted standards and procedures wherever possible).

The extent to which the law on safety of consumerproducts may constitute a technical barrier to trade cannotbe assessed without considering the special situation cre-ated by market shortcomings. Many goods are sold out-side their traditional market and some conformityassessment procedures which are used in stable marketeconomies are rendered unsuitable in the Russian Fed-eration. The falsification of certificates is also a seriousproblem. Structural changes, the divergent views ofauthorities and the persistence of important problems re-lated to safety and quality of marketed products hamperthe evolution of the system. However, important changesare being made in the preparation of technical regulations,standards, accreditation and certification.

III. ACCESSION TO THE WORLD TRADEORGANIZATION: REQUIREMENTS

The Russian Federation, Ukraine and many of theother Commonwealth of Independent States countries areseeking to become full members of WTO. It is thereforeuseful to review the progress they have made regardingthe adjustments that are necessary to meet the obligationsof the WTO agreements. The central document in this re-spect is the Agreement on Technical Barriers to Trade of15 April 1994. Some of the principal clauses in thisAgreement are summarized below. Further on, there is aconsideration of the current state of reforms with refer-ence to these clauses.

A. PREPARATION AND APPLICATION OFTECHNICAL REGULATIONS AND STANDARDS

According to WTO terminology, a technical regula-tion is a document that lays down product characteristicswith which compliance is mandatory. A standard is adocument approved by a recognized body that providesrules, guidelines or characteristics for products or relatedprocesses and production methods, with which compli-ance is not mandatory. Standards prepared by the interna-


tional standardization community are based onconsensus. The TBT Agreement also covers documentsthat are not based on consensus.

Some of the principal requirements that are valid fortechnical regulations as well as standards are summarizedbelow with reference to the article number in theWTO/TBT Agreement.

• Members shall ensure that in respect of technicalregulations, products imported from the territory ofany member shall be accorded treatment no lessfavourable than that accorded to like products ofnational origin and to like products originating in anyother country (art. 2.1);

• Members shall ensure that technical regulations arenot prepared, adopted or applied with a view to, orwith the effect of, creating unnecessary obstacles tointernational trade. For this purpose, technical regula-tions shall not be more trade-restrictive than necessaryto fulfil a legitimate objective, taking into account therisks non-fulfilment would create (art. 2.2). In otherwords, the product requirements should be in propor-tion to the risk being addressed and the least possibletrade restrictive means should be applied (the propor-tionality principle);

• Technical regulations shall not be maintained if thecircumstances or objectives giving rise to their adop-tion no longer exist or are changed (art. 2.3);

• Where technical regulations are required and relevantinternational standards exist or their completion is im-minent, members shall use them as a basis for theirtechnical regulations (art. 2.4). A Code of Good Prac-tice for Standards has been prepared and is referred tobelow;

• A member preparing, adopting or applying a technicalregulation which may have significant effect on tradeof other members shall, upon request, explain the jus-tification for that technical regulation (art. 2.5);

• Members shall give positive consideration to accept-ing as equivalent technical regulations of other mem-


bers even if these regulations differ from their own(art. 2.7);

• Whenever appropriate, members shall specify techni-cal regulations based on product requirements interms of performance, rather than design or descrip-tive characteristics (art. 2.8).

In view of the importance assigned to the use of inter-national standards as a means for facilitating trade, theTBT Agreement includes as an annex a Code of GoodPractice for the Preparation, Adoption and Application ofStandards (Code of Good Practice). Members shallensure that their central Government’s standardizingbodies accept and comply with this Code (art. 4.1).

The Code includes the following provisions:

• Where international standards exist, or their comple-tion is imminent, the standardizing body shall usethem, or the relevant parts of them, as a basis for thestandards it develops;

• The standardizing body within the territory of a mem-ber shall make every effort to avoid duplication of, oroverlap with, the work of other standardization bod-ies;

• Whenever appropriate, the standardizing body shallspecify standards based on product requirements interms of performance, rather than design or descrip-tive characteristics;

• At least once every six months, the standardizing bodyshall publish a work programme containing its nameand address, the standards it is currently preparing andthe standards which it has adopted in the precedingperiod. The International Organization for Standardi-zation (ISO) and the International ElectrotechnicalCommission (IEC) shall be notified of the existence ofthe work programme;

• Before adopting a standard, the standardizing bodyshall allow a period of at least 60 days for the summa-tion of comments on the draft standard by interestedparties within the territory of a member of WTO.The standardizing body shall take into account the


comments received during the period for comment-ing;

• Once the standard has been adopted it shall be prompt-ly published.

B. CONFORMITY ASSESSMENT

Conformity assessment procedures are used to deter-mine that relevant requirements in technical regulationsor standards are fulfilled. Common conformity assess-ment procedures include sampling, testing andinspection; evaluation, verification and assurance ofconformity, including certification, registration, accredi-tation and approval, as well as their combinations.

The most important provisions related to assessment ofconformity are:

• Conformity assessment procedures shall grant accessfor suppliers of like products originating in the terri-tories of other members under conditions no less fa-vourable than those accorded to suppliers of likeproducts of national origin or originating in any othercountry in a comparable situation (art. 5.1.1);

• Conformity assessment procedures are not prepared,adopted or applied with a view to, or with the effect of,creating unnecessary obstacles to international trade.This means inter alia that conformity assessment pro-cedures shall not be more strict or be applied morestrictly than is necessary to give the importing mem-ber adequate confidence that products conform withthe applicable technical regulations or standards(art. 5.1.2).

When implementing these provisions members shallensure that:

• Conformity assessment procedures are undertakenand completed as expeditiously as possible (art.5.2.1);

• Information requirements are limited to what is neces-sary to assess conformity and determine fees (art.5.2.3);


• Fees for assessing products from other members areequitable in relation to any fees chargeable for assess-ing the conformity of like products of national originor originating in any other country (Art. 5.2 5);

• The siting of facilities used in conformity assessmentprocedures and the selection of samples are not suchas to cause unnecessary inconvenience (art. 5.2.6);

• Members shall ensure, whenever possible, that resultsof conformity assessment procedures in other memberStates are accepted (art. 6.1).

C. NOTIFICATION AND INFORMATION

A basic principle of the TBT Agreement is that mem-bers shall not introduce new technical regulations orstandards which may have a significant effect on trade ofother members without due justification. In cases whereinternational standards do not exist and new technicalregulations are deemed necessary, members shall:

• Publish a notice in the publication in such a manneras to enable interested parties in other members tobecome acquainted with it (art. 2.9.1);

• Notify other members through the secretariat of theproducts to be covered by the proposed technicalregulation together with a brief indication of its objec-tive and rationale (art. 2.9.2);

• Upon request provide to other members particulars orcopies of the proposed technical regulation (art.2.9.3);

• Without discrimination, allow reasonable time forother members to make comments in writing and takethe comments into account (art. 2.9.4).

In addition to the notification procedure outlinedabove, each member shall ensure that an inquiry point ex-ists which is able to answer all reasonable inquiries, aswell as provide relevant documents regarding:

• Any technical regulation adopted or proposed withinits territory (art. 10.1.1);


• Any standards adopted or proposed within its territory(art. 10.1.2);

• Any conformity assessment procedures which are op-erated within its territory by central or local Govern-ment, or by non-governmental bodies (art. 10.1.3);

• The membership and participation of the member ininternational and regional standardizing bodies andconformity assessment systems, as well as in bilateraland multilateral arrangements within the scope of theTBT Agreement (art. 10.1.4);

• The location of published notices and enquiry points(arts. 10.1.5 and 6);

• Each member shall, promptly after the date on whichthe WTO Agreement enters into force for it, informthe Committee of measures in existence or taken toensure the implementation and administration of thisagreement (art. 15.2).

IV. ONGOING REFORMS

A. RUSSIAN FEDERATION

1. Overview

Since 1993, the Russian Federation has been substan-tially opened for trade with countries outside the formerCMEA. It is a national objective to join WTO. Bilateralnegotiations are also conducted with the United States,the EU and other major trade partners. This sectionpresents the progress made along those lines, as well asreferring to the remaining tasks and problem areas. Refer-ence is also made to developments in Ukraine and to othercountries members of the Commonwealth of IndependentStates.

Reforms in Russia and Ukraine have been supportedthrough the EU TACIS programme. TACIS assistance toRussia was estimated to be around ECU 290 million in1997. A project on standardization and certification inRussia and Ukraine started at the end of 1995. It wasbased on the agreed terms of reference in 1994. More than600 officials have already received training through this


programme, which also involves consultancy assistanceand development of information systems. The pro-gramme is due to end in 1998.

Since the start of the current TACIS programme onstandardization and certification, the political and institu-tional situation in Russia has passed through a number ofchanges. The general trend within some of the mainbodies designated as partners for the TACIS programmeis favourable. Gosstandart of Russia, the Chamber ofCommerce and Industry, the Ministry in charge of con-struction, and others, have received a considerableamount of know-how from western European experts inthe fields of technical regulations, standardization, ac-creditation and certification. They are now well aware ofwhat needs to be done in order to adapt the Russian sys-tem to one which is more compatible with that in the de-veloped market economies. These organizations havestarted to take the necessary measures to prepare the nec-essary documents within their fields of competence. It isexpected that the structural changes in the relevant Min-istries or State Committees will speed up the process oflegal and institutional change.

Another aspect of the TACIS programme in the fieldsof standardization and certification is linked to the nego-tiations for the accession of the Russian Federation toWTO. These negotiations deal with concrete matters suchas the TBT Agreement and the one on phytosanitarymeasures. As the Russian system of regulation, standards,accreditation and, especially, mandatory certification,still differs from corresponding systems in market econo-mies, this represents a cornerstone of the ongoing nego-tiations.

Considerable progress has been made within special-ized circles in grasping the principles of a market econo-my and preparing changes in technical regulations,standards, accreditation and certification. Following theadoption by the Russian partners in 1996 of the strategicplan prepared by the TACIS experts, several importanttexts have been either prepared or adopted concerningstandards, certification and accreditation:

• In the field of standardization, where the main task isthe separation of what is of a regulatory nature from


what is of a “voluntary” nature, important modifica-tions taking this requirement into account have beenbrought to the text describing the principles of organi-zation of the Russian standardization system Gost R1.0-92, amendment 2: “State system of standardiza-tion of the Russian Federation”. Amendments havealso been prepared to the Federal Law of 1993 onstandardization. Both texts are a proper basis for usingstandardization as a tool for developing a marketeconomy and for harmonization with western Europe;

• Several draft technical laws/regulations have been re-viewed to take into account the TACIS experts’ com-ments pertaining to their suitability as far ascompatibility with a market economy is concerned;

• In the more general field of harmonization, it is to benoted that Gosstandart took a World Bank loan whichit is going to use to complement what has already beendone (or is being done) within the framework of theTACIS programme, notably for harmonization pur-poses. The World Bank programme has already givenrise to several calls for tenders, directed towards moresupply of equipment and the installation of a LAN be-tween Gosstandart’s institutes, as well as towards de-veloping a methodology for harmonization ofstandards and technical regulations in fields deemedto be an economic priority. More is to come, especial-ly from the point of view of re-equipping metrologycentres and testing houses;

• In the field of accreditation, there is a project pendingconcerning the creation of the Russian System of Ac-creditation of Certification Bodies, Testing and Meas-uring Laboratories (ROSA). It is expected that thistext, which is suited to Russian purposes whilst adapt-ed as much as possible to western and internationalpractice, will be adopted in the near future by the Rus-sian Government;

• As far as certification is concerned, the Russian part-ners within TACIS have also prepared a draft federallaw introducing amendments and addenda to the Lawof the Russian Federation of 1993 on Certification ofGoods and Services. Lastly, a project of the formerMinistry of Industry for the setting up of a voluntary


certification system, Promsertika, has been developedand commented upon.

2. Problem areas

Economic and social transition from a totally regulatedeconomy to one organized along the principles of a lib-eral-market economy is already very difficult and timeconsuming. In Russia, this process is rendered even moreso by several factors:

• Owing to many structural changes since 1995, thereappeared diverse points of view between differentgovernment bodies. Views and practices regarding thequality and even safety of products that are marketedin Russia present serious problems. In those circum-stances, it is hard to bring quickly noticeable changeswithin the system. As mentioned above, many el-ements for the change are ready, but most of themhave not yet been implemented;

• Different “philosophical” standpoints between gov-ernmental bodies lead to conflicts of power whichhave as a secondary result the continuous lack oftransparency of the system. It is hoped that this can beimproved soon, at least on a technical level, thanks tothe supply of equipment which will permit the settingup of a WTO inquiry point in VNIIKI, one ofGosstandart’s institutes;

• The competence of the Russian conformity assess-ment bodies is frequently questioned by western ex-perts. These bodies are often not separated fromregulatory bodies and their competence and impartial-ity is not verified by any independent body. In Russia,there is not yet in effect a system of accreditationbased on internationally accepted principles;

• Gosstandart sets mostly national standards. Only 18per cent of Russian standards are based on ISO/IECstandards. Russia has an ambitious programme of re-placing national standards with ISO/IEC standards inthe years to come. Many standards are not in line withthe principles of the WTO/TBT Agreement. When-ever appropriate the standardizing body shall specifystandards based on product requirements in terms ofperformance rather than design or descriptive charac-


teristics. Many standards in the Russian Federationcontain detailed technical specifications. In fact, sev-eral are, in effect, company standards developed forthe previous State-owned monopolies. In addition, thestandards have not always been implemented andtechnical equipment for verification of compliancewith the standards may be missing;

• Many products imported for sale into the Russian Fed-eration are required to have a certificate of conformityissued by Gosstandart. Gosstandart tests and certifiesproducts according to Russian Government standards,rather than other widely accepted international stand-ards. There are also other mandatory certificationarrangements in effect;

• Business operators claim that the conformity assess-ment system in Russia is very elaborate and not trans-parent. Mandatory pre-market product certification isstill extensive and western experts often find that theconformity assessment procedures are out of propor-tion with the justification for these measures, such asprotection of health, safety and the environment. Rus-sia is a very large country and the enforcement ofregulations is left to local authorities. There is littlecontrol over the uniform implementation of existingrequirements and it is very difficult for outsiders toobtain reliable information in advance regarding theconformity assessment procedures. A certificate is-sued in Moscow may, for instance, not be accepted inSaint Petersburg;

• The complications briefly summarized above have ledto widespread evasion of regulations, or even to fraud.Falsified certificates, acceptance of bribes and mutual“services” are not uncommon. Such opportunitieshave, on the other hand, tempted exporters to exportsub-standard or even hazardous products into Russia.This again hinders the Russian authorities in theirliberalization of the system;

• Circulation of dangerous substances is limited to thosepossessing a “Substance Safety Licence” after beingregistered at the “Russian Register of Potentially Haz-ardous Chemical and Biological Substances”. There-fore, information about substance identification,


characteristics, potential dangers, production, field ofusage, safety measures and procurements concerningtransport and storing has to be offered. The final dateof application was 31 March 1996, but there are uncer-tainties regarding this date, creating significant obsta-cles to trade;

• Acceptance of test reports, product certificates and no-tably certificates for quality systems lacks transparen-cy and seems to be subject to arbitrary considerationby inspection officials of the customs authority. Inparticular the non-acceptance of products meetinginternational standards and the lack of clear rules onacceptance of tests and certificates from competentEuropean certification bodies raise concern.

The problems outlined above refer to many importantsectors of the economy, e.g. agriculture, pharmaceuticals,machinery, electrical and electronic equipment.

3. Prospects for an enlarged involvement in interna-tional trade

An enlarged participation of the Russian Federation inworld trade represents an opportunity for integration intothe world economy and a positive long-term impulse toeconomic adjustment and development. Expanded ex-ports of Russian goods may boost the domestic economy.In particular, Russia is concerned about retaining impor-tant markets in central and eastern European countrieswhich are now acceding to EU.

Imports of (investment) goods from the developedmarket economies represent an opportunity for the devel-opment of Russia’s industry and economy. However,such imports may also represent a threat to domestic pro-ducers that are unwilling or unable to adjust to the newcircumstances and who, in many cases, may not be able tocompete on an open market with world-class producers.

Simplification of the system for technical regulations,standards and conformity assessment procedures willease life for the domestic suppliers, by reducing theamount of administration associated with placing a prod-uct on the Russian market. In order to become a full part-ner in WTO, four main categories of action are useful:


• Harmonization of Russian technical regulations andstandards with internationally acknowledged ones in anumber of sectors;

• Extended use of conformity assessment proceduresfor products and services within the framework oftechnical regulations and standards in accordancewith international guides and recommendations, aswell as the development of a network of pilot labora-tories which can engage into a procedure of mutualrecognition with Western counterparts;

• Initialization of a process of support to the differentRussian federal bodies in charge of market surveil-lance and supervision, in order to help them ensure thequality and safety of goods put on the market and re-duce fraud in the field of conformity assessment; and

• Setting up in the Russian Federation a system of ac-creditation of conformity assessment bodies, in con-formity with the rules and procedures of ISO/IEC andfollowing accepted international guides and recom-mendations.

B. STANDARDIZATION-RELATEDDEVELOPMENTS IN CIS (COMMUNITY OFINDEPENDENT STATES) COUNTRIES:PROGRESS AND CHALLENGES

The accession of Kyrgyzstan to WTO was probablythe most encouraging sign that a CIS country’s tradingframework was approaching the requirements of WTO(also in the area of standardization). It gave a very prom-ising signal to other potential CIS candidates. However, itshould also be noted that, despite recent changes in theCIS economies under market transformation, reforms arestill required. In the area of standardization, these coun-tries still have similar regulatory and organizational sys-tems and are interdependent in many areas of trade andeconomic cooperation. This is the reason why CIS Statestry to coordinate their policies in the areas of standardiza-tion, metrology and certification. To this end, an agree-ment was signed by 12 countries, members of thegrouping, in 1992. This agreement provides, inter alia,for acceptance of the “living” State standards and State


measurement standards of the former USSR as CIS inter-State standards.

Among other accords concluded in the 1990s betweenCIS States are: on mutual recognition of certificates in re-spect of goods which are subject to mandatory certifica-tion; on mutual acceptance of the accreditation ofcalibration laboratories and of results of their tests; onpreparation of intra-State standards and regulations oncertification of tourism services; on labour safety. Al-though countries of the grouping face various difficultiesin their cooperation on these issues, nevertheless it is stillconsidered to be more successful than in many other areasof economic integration.

The practical work on coordination is entrusted to theCIS Interstate Council on Standardization, Metrology andCertification (CSMC), which has its secretariat in Minsk.It could be noted that major coordination and standardiza-tion initiatives in the grouping come mainly from theRussian Federation and Belarus.

Within the CIS Council (CSMC) the standard-settingactivities are carried out by 230 inter-State technical com-mittees. During 1993-1997, 950 standards were revisedand more than 1,900 new standards were developed andapproved. The total number of inter-State standards in theCIS at present is about 20,000.

4. National standardization

There are significant differences in a number of stand-ards and regulations adopted and used at national level.Thus, while the total number of standards and regulationsapproved by the primary standards body in Kyrgyzstanreaches 40,000, with about 40 per cent of them consideredmandatory, in Belarus there are 20,000 standards andregulations and all of them are partially or totally manda-tory.

There is no official information on to what extent CISstandards are harmonized with international standards.According to estimates of CIS experts, the average shareof standards identical to or based on international stand-ards varies in the CIS States depending on sector from30 per cent to 65 per cent.


The main reason for the slow process of transpositionof international standards to national standards in the CISis the lack of financial funds. Owing to budgetaryconstraints, CIS national standardization bodies are ex-periencing difficulties even in getting reduced allocationsto which they are entitled from the State budgets in theircountries.

At the same time, in the area of quality infrastructure,many CIS countries transposed and adopted as nationalstandards the ISO 9000 and ISO 14000 series of stand-ards. National quality certification bodies, in the area ofquality management systems for example, were estab-lished in Belarus, Republic of Moldova, Russian Federa-tion, Ukraine, and first national ISO 9000 certificateshave been issued.

5. Legislative framework

Market transformation reforms in the CIS Statesshowed, inter alia, the need for new principles for organ-ization of standardization and conformity assessmentactivities on a national level. It could be noted that the ne-cessity of adopting the philosophy of a market economyis well understood and it has already resulted, for in-stance, in the change from a mandatory to a voluntary roleof standards, in separation between regulatory and volun-tary regulations, in recognition of gaps in national legalframeworks. With this in view, most of the CIS countriespassed laws on the protection of consumers and on certi-fication of products and services. But, in certain cases, thecombat against dishonest business operators led to theintroduction of mandatory certification for dozens ofcommodity groups.

The change of emphasis from permanent control by theState over all aspects of standardization activities andmanufacturers and traders, in particular in the area of con-formity assessment, to market-driven mechanisms andschemes requires radical changes in the existing nationalsystems in the CIS.

To meet these requirements, CIS countries are aiming,inter alia, at filling the legal vacuum with new laws andregulations. For example, in Russia, laws and regulationson technical barriers to trade, on conformity assessment,


on suppliers’ declarations and other issues are beingdebated in Parliament.

Ukraine, in turn, has embarked on an ambitious pro-gramme to change its national technical regulation sys-tem. In March 1997 the Cabinet of Ministers issued adecree on actions related to the implementation of the EUdirectives, sanitary, environmental, veterinary, phyto-sanitary norms and international and European standardsin Ukraine. This decree calls for the preparation of 25 newlaws as well as of 14 sectoral programmes aimed at updat-ing and revising national libraries of standards andregulations.

New laws on the quality and safety of food productsand agricultural raw materials and on imports of agricul-tural products have already been enacted in Ukraine.Drafts of laws on the supplier's responsibility, on stand-ardization and certification, on accreditation, on milk andmilk products, on fish and sea products, laws on safety fordifferent groups of products are being prepared or dis-cussed in Ukraine at present.

Active changes in the legal framework are also beingcarried out in other CIS countries.

In spite of these efforts, even in the area of general leg-islation (for example, on general product safety) thesituation in the CIS is still quite different from that indeveloped market economies. Thus, excessive reliance oncertification in the CIS results also from numerous loop-holes in existing legislation. For example, in some cases,Governments are using certification as a market surveil-lance means against low quality or dangerous goods be-ing placed on the market. Here, one area requiring newlegislation is the liability of manufacturers/traders fornon-compliance with self-declared quality or other char-acteristics of a product.

6. Current problem areas

The example mentioned above shows that additionalsignificant changes still need to be made in the regulatorysystems into the CIS in order to bring it in line with coreprinciples pursued by WTO.


Concerning typical problems faced by business opera-tors (primarily foreign) on markets of the CIS States, thefollowing issues should be mentioned:

• Still existing confusion about clear distinction be-tween voluntary standards and mandatory technicalregulations (in some CIS States new “voluntary stand-ards” contain mandatory provisions, for example,concerning safety);

• Necessity for many important products to have a cer-tificate of conformity, usually issued by local testinglaboratories. Existence, in practice, of differentregimes for similar imported and domestic productsowing to loopholes in regulations and to absence of anefficient market surveillance mechanism, whichallows to a great extent uncontrolled sale of productsthrough “unorganized” trade (open air markets,“car boot” sales, etc.);

• Complicated and non-transparent conformity assess-ment system; existence of mandatory pre-marketproduct certification (particularly extensive in Rus-sia), which western exports often find to be out of pro-portion with the justification for safety, environmentalor other requirements;

• Non-acceptance of products meeting internationalstandards and lack of clear rules of recognition andacceptance of tests and certificates from competentEuropean certification bodies.

Considerable support to adopt principles of a marketeconomy in the areas of standardization, technical harmo-nization and conformity assessment is provided to theCIS by the EU through its TACIS programme.

A special project on standardization and certificationin Russia and Ukraine was launched in 1995. This projectincludes extensive training for State officials, consultancyassistance (for example, in drafting new laws) and devel-opment of information systems. Russian “Gosstandart” isalso using the loan it received from the World Bank to getnew computer equipment and create the necessary techni-cal basis for accelerating harmonization of national tech-nical regulation systems, with international standards andregulations.


Besides TACIS-funded programmes for the RussianFederation and Ukraine, a special TACIS project is beingimplemented for 10 other CIS States. Under this project(with CEN as an executing agency) the secretariat of theCIS Interstate Council on Standardization, Certificationand Metrology will receive the database of all EU norma-tive documents (standards, regulations and directives);necessary software and equipment in order to establish aninformation centre in Minsk and to link it with standardsbodies in other capitals of the CIS States; and also train-ing on the EU regulatory system and practice is organizedfor officials from these countries.

Without looking into specific problems faced by indi-vidual CIS States the major challenges to be met by themto become members of WTO and to be integrated in theinternational trade system include:

• Preparation and implementation of general and sec-toral legislation framework and change in regulatorysystems in accordance with WTO rules;

• Revision of the existing standards and their harmoni-zation with international standards;

• Respect of WTO principles referring to standardiza-tion and conformity assessment, in particular throughadoption of international guides and recommenda-tions in the area of conformity assessment (and as afirst step introduction of less restrictive means ofverification and assurance of conformity);

• Introduction into the practice of principles of volun-tary and flexible certification and of equal regulatoryrequirements for domestic and foreign manufacturersand traders;

• Restructuring of accreditation systems (separation ofaccreditation activities) in conformity with acceptedinternational practice.

Transition Economies and Integration into the Internal Market of the European Union 73

TRANSITION ECONOMIES AND INTEGRATIONINTO THE INTERNAL MARKET OF THE EUROPEAN UNIONIvar Foss10

I. INTRODUCTION

The objective of this paper is to shed light on the im-pact on central and eastern European countries (CEECs)of trading with and accession to the European Union(EU). Economic integration in the EU and the SingleEuropean Market is based on four freedoms of move-ment: goods, services, capital and people. Free circulationof products is based on the following key elements:

• Products legally manufactured in a member Stateshould benefit from free circulation throughout theEU;

• If a product does not fulfil essential safety and healthrequirements, this has to be demonstrated by the mem-ber States, not by the manufacturers;

• Member States can intervene only when a productdoes not respect an essential requirement, meaningthat in all other cases member States must allow freeaccess to the goods on their market.

Following these principles, the European Council, inMay 1985, approved a Resolution on the New Approachto technical harmonization and standardization. It com-bines the harmonization of regulations and national stand-ards, as well as the mutual recognition principles, byadopting a new strategy, based on five principles:

• The harmonization directives determine the essentialrequirements to be met by products placed on the mar-ket if they are to benefit from free movement withinthe Community;

73

10Ivar Foss, Quality Management, Oslo.


• The technical specifications governing the productionand marketing of products meeting the essential re-quirements set out in the directives will be laid downin European standards by the European standardiza-tion bodies (CEN, CENELEC, ETSI);

• Recourse to European standards remains voluntaryand compliance with the essential requirements maybe demonstrated in alternative ways;

• The manufacture of products in line with harmonizedEuropean standards leads to a presumption of con-formity with the said essential requirements andshould lead to less burdensome certification process-es;

• Conformity with the essential requirements or withEuropean standards is indicated by affixing a Euro-pean conformity certification to the product (CEmarking).

The new approach set requirements for products, aspart of the implementation of the Single Market. Seven-teen new approach directives have been approved on thisbasis. Further, in its resolution of 21 December 1989 onthe Global Approach to Certification and Testing, theEuropean Council stated as its aim to provide a homo-geneous, transparent and credible technical environmentwithin the Single Market in which public authorities,firms and users should be able to have confidence andwhich will ultimately lead to higher quality products.

The resolution on the Global Approach provides guid-ing principles for the EU policy as regards conformityassessment along the following dimensions:

• Use of “modules” concerning the different stages ofthe conformity assessment procedures and of the cri-teria for the designation and notification of bodiesunder those procedures;

• Generalized use of the European standards relating toquality assurance (ISO 9000) and the setting up ofaccreditation systems;

• Promotion of mutual recognition agreements concern-ing testing and certification in the non-regulatory


sphere, under the aegis of the European Organisationfor Testing and Certification (EOTC)

• Reinforcement of the development of existing qualityinfrastructures within the EU to minimize their differ-ences

• Promotion of external EU relations with the thirdcountries by means of mutual recognition agreementsand cooperation and technical assistance programmes.

II. IMPLEMENTATION OF STANDARDS

A. LEGISLATION, TECHNICALREGULATIONS AND STANDARDS

The degree to which directives have been implementedin national legislation (laws and technical regulations) issummarized in table 1. At the beginning of 1997, over 90per cent of the directives had been implemented in mostof the 15 EU member States, depending on the area underconsideration.

TABLE 1. National implementation of directives in EU on 1 January 1997

In addition to implementing harmonized EU legisla-tion, member States continue to prepare and implementnational regulations in areas not covered by EU legisla-tion. According to the information procedure (83/189/EEC), member States shall notify proposals for newnational regulations. The number of proposals notifiedduring the period 1994-1996 was as presented in table 2.

Number of countries

Area78-90% imple-

mentation90-100%

implementation

FoodstuffsPharmaceuticalsChemical productsMotor vehiclesIndustrial products (machinery,

electrical, etc.)

3260

0

12139

15

15


Thus, even though the Single Market was, in principle,completed at the end of 1992, the EU member States con-tinued to introduce a substantial amount of national tech-nical regulations, in addition to those harmonized on theEU level.

TABLE 2. Notification about new national regulations

Creation of EU standards has increased sharply since1990. These harmonized European standards (EN) aredeveloped by three European standardization bodies:

• CEN (general standards)

• CENELEC (electrotechnical standards)

• ETSI (telecommunication standards).

In 1997, the total production of European standards byCEN (by 1999 the number of European standards pro-duced by CEN reached 4,720) was around 800 and the to-tal number of applicable European standards was around4,000. The transposition of EU standards into nationalstandards without change is important for the visibilityand common application by the firms. National transposi-tion should take place within six months of the adoptionof the European standard.11

Production of European standards has, however, beenone of the bottlenecks for the implementation of the NewApproach Directives. As a consequence of missing stand-ards, manufacturers cannot use the alternative of compli-ance to harmonized European standards for affixing theCE mark to their product.

Year Proposals

1994 389

1995 439

1996 523

11For example, in 1995, 14 of the 15 EU member countries trans-posed more than 85 per cent of the standards developed by CEN. At thesame time 13 members had transposed more than 80 per cent of theCENELEC standards. Only two members had transposed more than 80per cent of the ETSI standards.


B. QUALITY INFRASTRUCTURE FORCONFORMITY ASSESSMENT

The concept of manufacturers’ declarations was wide-ly recognized through the introduction of the New Ap-proach directives. However, in spite of their advantages,manufacturers’ declarations have not yet seen the wide-spread use that was expected. As a consequence of thenew policies, the product-certification bodies had tochange their procedures for certification, in order to com-ply with the directives and standards. Furthermore, manycertification bodies were not independent of regulatoryauthorities and reorganization was required. Many prod-uct certification bodies have been privatized or have re-ceived a status independent from their State owner. Thistransition is well under way all over western Europe.

The application of quality systems has received astrong boost within western Europe. The number of qual-ity-system certificates issued by the end of 1996 in west-ern Europe was 108,425. The leading country in thisregard was the United Kingdom (over 53,000 certifi-cates). It was followed by Germany (about 13,000),France and the Netherlands (8,000 each) and Italy (morethan 7,000). Accreditation was also one of the noveltiespromoted as part of the new policies, even if a few ac-creditation bodies had existed previously. Since the late1980s, almost every country in western Europe has estab-lished one or more accreditation bodies. In 1998, mostcountries had one accreditation body, the most notableexception being Germany which boasts five.

The confidence in accreditation rests on compliancewith the standards for accreditation in the EN (EuropeanStandard) 45000 series. Accreditation bodies have estab-lished multilateral agreements for mutual recognition ofaccreditation. Those bodieswhich have signed such agree-ments accept the other signatories’ accreditation as beingequal to their own. Consequently, this will also simplifythe further recognition of certificates, test results and cal-ibrations in all the signatory countrieswithout their havingto do their own independent evaluation. Most countries inwestern Europe are now members of at least one mutualrecognition agreement and the number ofmembers in eachagreement is increasing steadily. Since accreditation isvoluntary, its application varies from country to country


and from industry to industry. Most of the certificationbodies in western Europe are accredited or are in the proc-ess of obtaining accreditation. For calibration laboratories,accreditation is also widespread. In most countries, ac-creditation of testing laboratories is much less common.

C. PROBLEM AREAS ANDFUTURE CHALLENGES

In spite of the relative simplicity of the legal systemintroduced by the New Approach, the legal system in theSingle Market is still complicated. The New Approach isvalid only for a specified number of industries and theprinciples have not been implemented consistently in allof them. In addition, a large volume of directives remainsin the “old” format.

Certain industries are still lagging behind regarding thepractical implementation of directives and national legis-lation (for example, with regard to construction goods).TheEuropean standardization bodies still havemuch to do.Comparing the volume of European standards at presentwith the volume of standards in major industrial countries,several thousand standards remain to be developed.

The conformity assessment infrastructure is highly de-veloped, even if there are still new areas to be covered.Many countries have reported technical barriers to tradein the form of national requirements to marking, repeatedtesting or recertification, particularly in large industrialcountries such as France, Germany and the UnitedKingdom.

III. REQUIREMENTS FOR THEACCEDING COUNTRIES

A number of central and eastern European countries(CEECs), including the Baltic States, are aiming at acces-sion to the EU. This section considers primarily the situa-tion for the countries that already have associationagreements with the EU (Bulgaria, Czech Republic, Esto-nia, Hungary, Latvia, Lithuania, Poland, Romania, Slo-vakia and Slovenia). The EU selected five applicantCEECs in 1997 to start negotiations for full membership.The countries in this group are the Czech Republic, Esto-


nia, Hungary, Poland and Slovenia. Accession negotia-tions started in March 1998. However, most of the othercountries in the CEEC group have a system that operatesaccording to the same principles and they expect to getassociation agreements in the future.

The principal requirements for countries that want tobecome full members of the EU were laid down by theEuropean Council meeting in Copenhagen in June 1993.The following was stated:

The associated countries in central and eastern Europethat so desire shall become members of the Union. Acces-sion will take place as soon as a country is able to assumethe obligations of membership by satisfying the economicand political conditions. Membership requires:

• That the candidate country has achieved stability ofinstitutions guaranteeing democracy, the rule of law,human rights and respect for and protection of minor-ities;

• The existence of a functioning market economy, aswell as the capacity to cope with competitive pressureand market forces within the Union;

• The ability to take on the obligations of membership,including adherence to the aims of political, economicand monetary union.

The European Commission presented the White Paper:Preparation of the associated countries of Central andEastern Europe for integration into the Internal Marketof the Union in 1995. The White Paper provides a guidethat assists the associated countries in preparing for com-petition under the requirements of the Single Market.Alignment with the Single Market is to be distinguishedfrom accession to the EU, which will entail full accept-ance and implementation of the acquis communautaire(all applicable EU laws and practices).

The White Paper identifies the key measures in eachsegment of the Single Market and suggests a sequence inwhich the approximation of legislation should take place.However, a merely formal transposition of legislationwill not be enough to achieve the desired economic im-pact or to ensure that the Market functions effectively af-


ter further enlargement. Accordingly, equal importance isattached to establishing adequate structures for imple-mentation and enforcement, which may be a far moredifficult task.

The White Paper focuses on the legislation that is es-sential for the operation of the Single Market. It presentsthis legislation in a way that shows the key measures ineach segment and the measures that should be tackledfirst. It does not attempt to establish priorities betweenvarious segments of the Market.

Under the heading Free movement and safety of indus-trial products, the White Paper addresses the followingareas:

• Prevention of new barriers to trade (introduction of thenotification procedure, Dir. 83/189/EEC);

• New Approach directives;

• Sectoral-approach directives.

The acceding countries themselves have the main re-sponsibility for alignment within the Single Market andwill establish their own priorities, but the EU is alreadyproviding assistance, notably through the PHARE pro-gramme. Under PHARE, there are national programmesfor several of the associated countries. In addition, thereis the Regional Programme on Quality Assurance(PRAQ). PRAQ 91 comprised the six countries that werefirst to enter into association agreements with the EU(Bulgaria, Czech Republic, Hungary, Poland, Romaniaand Slovakia). PRAQ 92 comprised the three Baltic coun-tries, plus Albania and Slovenia. PRAQ III was estab-lished for the four-year period 1996-1999 with a budgetof ECU 30 million, financed by the EU and the EuropeanFree Trade Association (EFTA). In addition to the coun-tries mentioned above, Bosnia and Herzegovina and theformer Yugoslav Republic of Macedonia were admittedto PRAQ III, bringing the total number of countriescovered by this programme to 13.

PRAQ III addresses three principal areas:

• Harmonization and alignment of legislation and tech-nical regulations;


• Development of the quality infrastructure;

• Actions related to economic operators.

Additional help is provided through the TechnicalAssistance Information Exchange Office (TAIEX), estab-lished by the European Commission in 1996. TAIEXoffers a range of services such as providing texts of legis-lation, short-term expert missions and workshop sessionsin Brussels on key Single Market issues.

Negotiations have now been initiated to establish mu-tual recognition agreements with the countries accedingto the EU as full members. To make the distinction withtraditional mutual recognition agreements clear, the titleEuropean Conformity Assessment Agreements is used.The acceding countries are preparing to take over, im-plement and enforce the entire acquis communautaireand to align their technical regulations with EU legisla-tion. These agreements concern not only third-partycertification but also other forms of conformity assess-ment such as the application of the manufacturers’declarations.

Agenda 2000 for a Stronger and Wider Union is theEU plan for the medium-term future (2000-2006). Deliv-ered in July 1997, it operationalized the enlargement pro-cedure. As was the case during all previous enlargementsof the EU, the basis for the accession is the EU acquiscommunautaire as at the time of enlargement (around80,000 pages of legislation in 1998). Agenda 2000 em-phasizes that the objective of the EU is to have the newmembers apply, implement and enforce the acquis uponaccession; in particular, the measures necessary for theextension of the Single Market should be applied im-mediately. Transition measures—but no derogations—may be agreed in the course of negotiations, in duly justi-fied cases. They should ensure the progressive integrationof the new members into the Union within a limitedperiod of time,12 otherwise, the new members would beprevented from exercising their right to participate fullyin the Union’s decision-making process. The EU wants toprevent any kind of second-class membership or opt-outs.

12 European Commission: Agenda 2000 for a Stronger and WiderUnion, Brussels, 15 July 1997, COM(97) 2000 final, vol. I, pp. 60-61.


In-depth preparation for full membership on the part of allthe applicant countries prior to the entry is therefore ofkey importance for both parties.

IV. REFORMS IN THE ACCEDINGCOUNTRIES

A. LEGISLATION, TECHNICALREGULATIONS AND STANDARDS

The status on implementation of legislation and tech-nical regulations, as well as for standardization, in the 13PHARE countries is summarized in table 3.

The implementation status of legislation and technicalregulations has been divided into three groups. Sevencountries are at an early stage of implementation. Typicalfor this group, there are isolated efforts in a few ministriesto translate EU legal documents and implement them inthe national legislation. Since there is no coordinated or-ganization for translation, the quality of the latter may behighly variable. A national structure for the implementa-tion work has not yet been organized in all countries, butis under establishment. In the Czech Republic and Hun-gary a large number of the White Paper’s requirementshave already been implemented in a systematic way. Po-land, Romania, Slovakia and Slovenia are in the processof implementation, with various stages of progress.


TABLE 3. Status on implementation of legislation and technical regulationsand of standardization in the PHARE countries

(1) x = advanced; (x) = in progress; - = early stage; .. = not known.(2) x = yes; (x) = partly; - = no; .. = not known.x = full member; (x) = associated member; - = no; .. = not known.Data from CEN (May 1999).Source: Data from CEN and/or national sources.

B. STANDARDIZATION

The initials of the national standards bodies in the13 countries are given in table 3. In most cases thesebodies have a history as national standardization bodiesfrom the central-planning era. For some countries thestandardization bodies are normally based on branches ofthe previous national standardization body. The standard-ization institutions are in many cases national competencecentres, not only for standardization, but also for certifi-cation, metrology, accreditation, quality managementand, in one case, intellectual property rights.

The combination of activities mentioned above maycreate conflict of interests between accreditation and cer-tification or metrology. It is particularly important that

Standardization

Country

AlbaniaBosnia and

HerzegovinaBulgariaCzech RepublicEstoniaFYR of MacedoniaHungaryLatviaLithuaniaPolandRomaniaSlovakiaSlovenia

-

--x--x(x)-

(x)(x)(x)(x)

DCS

SMPBIS/CSM

CSNI/COSMTEVSISM

MSZTLVSLSTPKNIRS

UNMSSMIS

-

-xx--

(x)..xxx(x)x

(x)

(x)x(x)..-

(x)(x)(x)(x)(x)(x)(x)

00139

0..001753 9730 067

-1 499001370028500851003981 2622 345

Implementationof legislationand technicalregulations (1)

Stand.body

Memberof CEN

(3)

No. ofEns(4)

Voluntary(2)


accreditation be independent of such activities and thatregulatory functions be separate from conformity assess-ment. This conflict of interest is most pronounced inAlbania, Bulgaria, Poland and Romania.

The standardization bodies were previously parts ofgovernment, sometimes independent ministries. At theend of the 1990s, the degree of independence from gov-ernment varies from one country to another, but in mostcountries the bodies have a fairly independent status.

An important indicator of the progress of reforms is theextent to which voluntary standardization has been intro-duced. In the previous system, standardization was man-datory for a large number of products. Table 3 shows thatvoluntary standardization is well advanced. In six coun-tries this principle is fully implemented, with a few smallexceptions, perhaps. In Hungary and Slovakia, the princi-ple has been accepted, but has not yet been fully imple-mented. However, rapid progress is being made.

In all countries where the situation is known, the na-tional standardization body is either a full member ofCEN or an affiliate member. One of the requirements forbecoming a full member is for more than 80 per cent ofthe CEN standards (ENs) to have been implemented na-tionally. The acceding countries consider this to be a verystrict requirement.

C. QUALITY INFRASTRUCTURE FORCONFORMITY ASSESSMENT

In the former centrally planned system, central andeastern European countries were subject to more or lessthe same mandatory certification regime. Pre-marketproduct certification was required for a vast range ofproducts. Certification depended to a large extent on test-ing. Many countries had a well-developed laboratoryinfrastructure, often associated with scientific research in-stitutes. Most of the equipment is currently out of date andmany testing procedures are related to the GOST stand-ard. Financial constraints have slowed down the renewalof testing equipment in most CEECs. However, the com-petence of the staff could meet, in general, EU standards.At the same time some of the candidate countries have al-ready experienced significant progress both in application


of European standardization and in upgrading of labora-tory equipment of relevant bodies.

The situation in the certification area is illustrated intable 4. All countries are now working to reduce the scopeof mandatory product certification, but in 1997 they hadat least a limited amount of mandatory product certifica-tion. In some countries (Czech Republic, Estonia, Hunga-ry and Romania), mandatory product certification waslimited to a few sectors with strong safety implications.Typical examples are foodstuffs and electrical equipment.

In Poland, for instance, a system of mandatory pre-market product certification was established in 1994, cov-ering more than 1,400 manufactured products. Thesecome from a range of industries, including steel, chemi-cals, pottery and ceramics, paper, electrical appliancesand automobiles. Poland signed a Protocol on EuropeanConformity Assessment Agreement with the EuropeanCommission in March 1997 to remedy this situation. Newlaws on testing and certification, as well as product liabil-ity and safety, were under preparation in 1998. This isexpected to resolve the country’s certification problems.


TABLE 4. Status of selected conformity assessment indicators in thePHARE countries (as of June 1998)

(1) x = yes; (x) = limited; .. = not known.

The Czech Republic adopted the Act of Technical Re-quirements for Products in 1997. This Act should pavethe way for the adoption there of technical regulations,standards and conformity assessment procedures whichare virtually compatible with the EU New Approach totechnical harmonization and the Global Approach toconformity assessment.

In all PHARE countries where information is avail-able, product certification bodies have been established.The approximate numbers are indicated in table 4. Themarket for voluntary product certification is difficult inmost countries. Manufacturing is familiar with manda-tory certification and is not yet convinced about the valueadded of voluntary product certification as a means to

Accreditation

Country

Mandatoryproduct

certification(1)

No. ofcertification

bodiesAccreditation

bodyAccred.

labsAccred.

cert. bodies

AlbaniaBosnia and

HerzegovinaBulgariaCzech RepublicEstoniaFYR of MacedoniaHungary

LatviaLithuaniaPolandRomania

SlovakiaSlovenia

x

xx(x)(x)..(x)

xxx(x)

xx

1

8a few415..70

7-107-10..4

1015

DSC, DKMK

SMPCSMCAIEVSISM

OMH/MABNAT

LATAKLA

PCBCIRS

RELARSNASSMIS

<5

02502153..

250

301010030..

11515

0

00330..0

11404..101


satisfy safety requirements and strengthen the marketposition of its products.

The flexible system of conformity assessment pro-cedures introduced through the EU Global Approach re-quires a system for market surveillance in order to checkcompliance. In general, such systems are not developed inthe PHARE countries. On the other hand, most of thecountries have traditional State Inspectorates which werepreviously used to supervise the mandatory product certi-fication. In many countries these are very large organiza-tions which are in need of major restructuring.

Quality-system certification is rapidly increasing incentral and eastern Europe. At the end of 1996, 1,536 cer-tificates were issued in that region (including the CIS), ahuge growth from the 8 certificates issued at the begin-ning of 1983. Hungary (with 423 certificates at the end of1996), the Czech Republic (366), Poland (260), Slovenia(152) and Slovakia (135) stand out as the top five coun-tries in this respect.

Quality-system certification does not have the sametraditions as product certification in central and easternEurope. Several PHARE countries have not yet estab-lished a national quality system certification body. How-ever, all countries have access to the quality systemcertification bodies in western Europe. These bodies op-erate globally and they have established local offices inseveral central and eastern European countries.

D. METROLOGY

Metrology activities in central and eastern Europehave also been subject to a major change. These institu-tions were traditionally concentrated on legal metrologyto confirm compliance with laws and regulations. Theirmain task was to maintain a list of instruments to be cali-brated and to check that all the instruments were in order.In a market economy the metrological institutes have tocater to the needs of industry. Industry has to know withcertainty when they make their measurements and themetrological institutes must provide a service to thiseffect.

The Czech Republic, Hungary, Poland and Slovakiahave already advanced well in their reforms, and Slovenia


is developing quickly. The other countries, however, areat variable stages of transition and development. In some,reforms are at a very early stage. Metrological equipmentis expensive and there is a rapid technological develop-ment in this field. Owing to financial constraints andvarious priorities, equipment in many of the countries isobsolete. A special problem in metrology is traceability ofnational standards to international ones. The EU-accedingcountries already have traceability to western Europeanand global standards. Some of the other countries havetraceability to Russian standards, but many have no trace-ability at all.

E. ACCREDITATION

Accreditation is one of the principal mechanisms forimplementation of the Single Market. The principles ofaccreditation were not applied by the previous system incentral and eastern Europe. It is therefore impressive thatall PHARE countries have established their own nationalaccreditation bodies. An overview, giving their acronym,is presented in table 4. Most countries have one accredi-tation body, following the current trend in westernEurope, but three countries have two such bodies.

Laboratory accreditation is most widespread and thenumber of accredited laboratories indicates a high level ofactivity. These include testing laboratories, as well ascalibration laboratories. Accreditation of certificationbodies is not as advanced but countries such as the CzechRepublic, Poland and Slovakia have already certified alarge number of certification bodies. Some countries, inaddition to product certification and quality-system certi-fication, have also introduced certification of personnel,e.g. of welders or non-destructive testing operators.

V. PROBLEMS

A. NATIONAL LEVEL

Regarding legislation and technical regulations thebasic problem is to create an understanding of themechanisms of the Single Market, which all associatedcountries aim to join. A considerable number of princi-


ples which are new to central and eastern Europe have tobe introduced. Some of the most important ones include:

• Distinction between essential safety requirements andtechnical specifications (standards, etc.);

• Principle of voluntary standardization;

• Introduction of a flexible modular system for con-formity assessment;

• Principle of voluntary product certification;

• Opportunity to use manufacturers’ declarations;

• Introduction of quality system (ISO 9000) as a meansof conformity assessment;

• Certification of quality system;

• Concept of notified body;

• Accreditation of laboratories, certification bodies andinspection bodies;

• Notification procedure as a means to prevent the crea-tion of new barriers to trade.

In addition to these matters of principle comes thepractical problem of translating the large volume ofdocuments, as well as the implementation in large andcomplicated organizations. Another problem area is theorganization of the quality infrastructure and separationbetween regulatory functions and other functions of thequality infrastructure. In particular, this is important forthe standardization bodies which often find themselves inconflict-of-interest situations.

There is also a need to develop institutions to deal withquality infrastructure. This may mean establishing newinstitutions or restructuring older ones. This is not only areorganization but a deep transformation, including thefundamental role of each institution. The institutions inquestion are:

• Certification bodies (product, quality system andpersonnel certification);


• Metrology institutions (national metrology centre andcalibration laboratories);

• Market surveillance organizations;

• Accreditation bodies.

Testing and inspection bodies have not been includedsince the problems in these areas are limited. The finan-cial constraints are important for the restructuring of thequality infrastructure. The limited and sometimes slowunderstanding of the new trade regime in industry is alsoan important problem area. Industry will have to adapt tothe new system, not only when exporting to westernEurope, but also for products to be placed on their domes-tic markets. Finally, it should be recognized that an over-riding target of public authorities in these countries is toprotect their society against sub-standard or hazardousproducts and activities. After the previous regime, severalof the countries were left without any legal infrastructureat all and had to build one from scratch. The opportunitywas seized by many unscrupulous traders who marketedgoods of low quality or even hazardous products.

B. INTERNATIONAL TRADE PARTNERS

The major obstacles experienced by international tradepartners have already been referred to but are listed belowonly to serve as a brief reminder:

• Mandatory product certification;

• Western European certificates, even from accreditedcertification bodies, are not recognized (rules for rec-ognition have not been established or are ambiguous);

• Repeated testing is required;

• Conformity assessment procedures cause additionalcosts and long delays.

C. PROSPECTS

Considering the immense task of transforming theeconomies of central and eastern Europe, the results al-ready achieved could be described as quite impressive.Countries such as the Czech Republic and Hungary standout as good examples in several of these aspects.


The process of economic transition represents an op-portunity for integration not only into the EU, but alsointo the world trading system. Such integration is one ofthe main conditions for a positive economic development.Many of these countries are now in a position to boosttheir export and open up new markets.

Simplification of the system for technical regulations,standards and conformity assessment procedures will alsofacilitate business for domestic suppliers by reducingthe amount of administration and costs associated withplacing a product on the market.

VI. CONCLUSION

In the coming years the PHARE countries willgradually continue to adjust their rules and conformity as-sessment procedures to those applied in the Single Mar-ket. Whereas the most advanced transition countries havemade important steps in this direction, it must be expectedthat around a decade will elapse before all the PHAREcountries are at this stage. In other words, one is facing arather long period of transition.

There has been a tendency for the PHARE countries toreduce the proportion of their foreign trade with the Com-monwealth of Independent States, while at the same time,increasing their trade with western Europe. Under the pre-vious regime the bulk of trade was within CMEA. Despitethese changes, trade with the CIS is expected to remainimportant in the future. The PHARE countries will there-fore have a dual system during the transition period,which incorporates Single Market principles, as well asprinciples valid for their main trading partners in the CIS.The GOST standard can be expected to gradually loseground. However, it is uncertain how long a time it willtake until the conformity assessment procedures of Rus-sia, Ukraine and other large CIS countries are changedaccording to the WTO/TBT Agreement.

Even if the PHARE countries are now developing theirsystem in accordance with the principles of the SingleMarket, they should still be able to retain a certain advan-tage over western European countries in their trade withthe CIS region. They are familiar with that system from


the past and they still may have good personal contacts. Itshould be possible for the PHARE countries to operatethe dual system during the transition phase, thus avoidinga loss of trade with the CIS region as a consequence oftheir gradual approximation to the Single Market legisla-tion.

The advantage for the PHARE countries will be tostrengthen their own economies through increased tradewith western Europe. The PHARE countries are com-petitive at least in several manufacturing industries andare at the moment eagerly developing new business rela-tions with western Europe. On the other hand, they will beexposed to increased competition in their domestic mar-kets as trade barriers are removed. It is of paramountimportance for them to develop the competitiveness ofthe manufacturing sector in parallel with lowering thebarriers to trade. Any imbalance could give rise to seriouseconomic problems.

These countries represent a growing market for west-ern European products. Western Europe will also be ableto use them as an industrial base, perhaps mainly as sub-contractors in their own industrial ventures. In a few sen-sitive areas, however, western European industry may bethreatened by export products from these countries.

Russia, Ukraine and other countries in the CIS regionmay experience a widening economic gap between theCIS and the PHARE countries. This development is al-ready visible. The difficult economic situation in the CIScountries may, however, be a more decisive reason for thedifferences than trade barriers themselves.

Other present and future trade partners of the PHAREcountries should mainly be positively affected by thePHARE countries’ approach to the Single Market. Thisdevelopment will result in a faster transformation ofregulatory and conformity assessment practices thancould otherwise be expected. As the system in thePHARE countries gets into line with the Single Marketregime, trade partners who are used to western Europeanpractices will meet a familiar regime.

The Role of UN/ECE in Standard-Setting and Standardization-Related Areas 93

ROLE OF UN/ECE IN STANDARD-SETTINGAND STANDARDIZATION-RELATED AREASSerguei Kouzmine13

I. OVERVIEW

The United Nations Economic Commission forEurope (UN/ECE), through its various subsidiary bodies,provides forums for discussing issues relating to the fa-cilitation of intraregional trade and investment, and eco-nomic cooperation and integration. Responding to theneeds of its member States, UN/ECE assists Govern-ments in two principal forms:

• By setting standards and making recommendations;

• By providing the latest official data, which are subse-quently used in the decision-making process, raisingawareness about the problems and their solutions, aswell as by promoting participation of main interestedgroups such as Governments and the public and pri-vate sector in the work activities.

UN/ECE thus contributes to the integration of sustain-able development principles into policies pursued at thenational, subregional and regional levels. This papergives a brief outline of UN/ECE’s standard-setting andrelated activities.

II. GENERAL ACTIVITIES

UN/ECE provides countries with up-to-date informa-tion, statistical and other data, results of economic analy-sis, and exchange of experience. The purpose is to informpolicy makers of the tools available for formulating andimplementing policy, as well as to enhance the dialogueamong interested parties within a single country or in the

13UN/ECE secretariat, Geneva.

93


region. This form of assistance is of particular use to thecountries in economic transition, which have seriousproblems to overcome in their transition process.

With regard to developing/setting standards, norms,regulations and recommendations, UN/ECE activities canbe divided into:

• Preparing and implementing intergovernmentalagreements and conventions (usually of a “frame-work” type);

• Preparing and implementing technical regula-tions/recommendations and standards that simplifytrade documentation and thus facilitate trade;

• Developing methodologies, classifications, norms/indicators;

• Preparing policy guidelines, best-practice guides andrecommendations of model contracts.

Intergovernmental agreements, conventions and proto-cols are binding for countries parties to agreements; otherlegal and policy instruments, however, are voluntary.

Governments can use UN/ECE standards and recom-mendations by adopting them entirely as models for legalinstruments or they can use them in preparing and draft-ing relevant national regulations. Model contracts (guideson preparing agreements on specific subjects) and/or theirprovisions are used by business operators in their transac-tions or as a basis for drafting new contracts.

III. SPECIFIC ACTIVITIES

A. ENVIRONMENT

Twelve internationally binding legal instruments (fiveconventions and seven protocols) relating to the environ-ment have been developed and adopted. The conventionsrelate to long-range transboundary air pollution (sevenprotocols to this Convention concern control over par-ticular air pollutants), environmental impact assessment,transboundary effects of industrial accidents and the pro-tection and use of transboundary waters. A draft conven-


tion on access to environmental information and publicparticipation in environmental decision-making hasrecently been prepared.

B. TRANSPORT

Fifty-one major agreements and conventions currentlyfacilitate international transport in the following areas:

• Transport infrastructure (European agreements on:main international traffic arteries, railway lines, com-bined transport lines, inland waterways of internation-al importance);

• Road safety (conventions/agreements on road traffic,road signs and signals, road markings, issue and valid-ity of driving permits);

• General problems relating to international road trans-port (conventions/protocols on different issues, suchas the working conditions of drivers, taxation, privatelaw questions;

• Technical regulations for road vehicles, their equip-ment and parts;

• Border-crossing facilitation (customs conventions: ontemporary importation of road vehicles; on harmoni-zation of frontier controls of goods; on customs treat-ment of pool containers used in internationaltransport; and on international transport of goods un-der the TIR convention);

• Inland navigation (conventions and protocols con-cerning inland navigation-registration, measurementof vessels, liability of owners, etc.);

• Transport of dangerous goods;

• Carriage of perishable foodstuffs.

Over 100 concrete and detailed technical regula-tions/uniform provisions for wheeled vehicles have alsobeen adopted. These regulations are concluded in relationto the international agreement of 20 March 1958 concern-ing the uniform conditions of approval and reciprocalrecognition of approval for motor vehicles, equipmentand parts that can be fitted and/or used on them.


C. TRADE FACILITATION

UN/ECE has for several decades been involved in sim-plifying and harmonizing trade-standard documentation.Adopted in 1963, the first UN/ECE model for documentsin foreign trade transactions (UN/ECE Layout Key) waslater used as a basis for standardizing forms of variousdocuments such as the ones relating to internationalcarriage of goods by different means of transport or forcustoms purposes. In 1985, the Layout Key was issued asan international standard by the International Organiza-tion for Standardization (ISO).

In 1986, UN/ECE launched UN/EDIFACT with thegoal of creating a single standard for electronic data inter-change, which would be flexible enough to meet the spe-cific needs of Governments and private businessoperators. The importance and international dimension ofthis challenge is widely supported by the active participa-tion in these activities of a number of countries and organ-izations from outside the UN/ECE region.

In March 1997, UN/ECE established the Centre for theFacilitation of Procedures and Practices for Administra-tion, Commerce and Transport (UN/CEFACT). Over 100standard electronic “messages” (formats or simplifiedversions of certain parts of foreign trade documents) havebeen developed under the auspices of UN/EDIFACT.

UN/ECE also prepares recommendations with a viewto encouraging harmonization of standard documentsused in foreign trade (26 such recommendations havebeen adopted). Some of the recommendations constitute amodel for the design of trade and transport documents(concrete or in general), allowing for a uniform form oftransmission of information and data, or for complement-ing or replacing documents that existed earlier.

Other recommendations deal with the presentation ofspecific types of information in international trade con-tracts (by providing codes and abbreviations for goods,types of cargo, modes of transport, units of measurement,names of locations, currencies, etc.). These facilitate thepresentation of data in an unambiguous and automatedform in data interchange between participants in interna-tional trade.


In 1997, UN/ECE adopted a recommendation on theuse of the UN/EDIFACT standard. The Commission haspassed it on to the Economic and Social Council of theUnited Nations for endorsement as an internationalUnited Nations recommendation. At present, theUN/EDIFACT standard is widely used in the regioncovered by UN/ECE by a growing number of public andprivate companies and international organizations. Theendorsement of this standard by the Economic and SocialCouncil will facilitate its implementation in other parts ofthe world.

D. AGRICULTURE

UN/ECE also deals with harmonizing national stand-ards with international standards that deal with the com-mercial quality of a wide range of perishable products,including fresh and dried fruit and vegetables, seed pota-toes, egg products, meat and cut flowers. General condi-tions for sale of various agricultural goods and arbitrationrules for certain categories of perishable agriculturalproducts were prepared during the 1960s and 1970s.

The UN/ECE Working Party on Standardization ofPerishable Produce and Quality Development and itsmeetings of experts have drawn up close to 100 standardsfor the purpose of facilitating international trade amongand with UN/ECE member countries. This work is basedon the Geneva Protocol on Standardization of Fresh Fruitand Vegetables and Dry and Dried Fruit. WorldwideCodex standards for fruit juices and quick frozen foodshave also been drawn up jointly by groups of experts ofUN/ECE and the FAO/WHO Codex Alimentarius Com-mission.

Many of the UN/ECE standards for perishable producehave served as the basis of the quality standards of the EU.Explanatory brochures based on UN/ECE Standards areprepared by the Organisation for Economic Co-operationand Development (OECD) Scheme for the Application ofInternational Standards for Fruit and Vegetables. Thesepublications include colour photographs as illustrations ofspecific defects and instructions for the evaluation of suchdefects. They serve as a practical tool for interpretingstandards, as well as for promoting uniform applicationinternationally. These commercial quality standards find


wide international acceptance. Explanatory publicationshave also been issued for poultry meat and eggs in shellby UN/ECE Meetings of Experts. Workshops on theharmonization of national standards with internationalcommercial standards and quality-control procedureshave been organized in countries in transition as a meansfor facilitating trade.

The standards set by UN/ECE clearly affect all coun-tries that export perishable produce, particularly thosethat export to the European region.

E. TIMBER

General conditions for export and import of sawnwood, as well as of hardwood logs and sawn hardwoodfrom the temperate zone, were prepared under the TimberCommittee during the 1950s and 1960s. UN/ECE drewup and recommended standards on stress grading and onfinger jointing of coniferous sawn timber during the1980s. These were later partially adopted as part of therelevant ISO standards.

F. TRADE

During the 1950s and 1960s UN/ECE drew up a seriesof standard general conditions of sale for exports and im-ports of engineering industrial and consumer goods.Some of them (for example, general conditions for thesupply of plant and machinery for export) are still beingused by firms as the basis for contracts.

From the 1970s to the beginning of the 1990s,UN/ECE also prepared a series of guides on drawing-upinternational contracts relating to the transfer of know-how, large industrial projects, technical assistance, jointventure, counter-purchase and buy-back contracts.During the 1990s, UN/ECE has been publishing guideson legal aspects of privatization in industry, for managersand for small and medium-sized enterprises in countriesin economic transition.

The European Convention on International Commer-cial Arbitration provides for the settlement of problemsrelating to international transactions. Concluded in 1961,this Convention is currently being revised.


G. STATISTICS

Principal activities in the field of statistics include har-monization of terminology used for the collection of sta-tistical data in different sectors, and the preparation ofguidelines for uniform data collection, use and interpreta-tion.

The prepared statistical standards, classifications andrecommendations cover various areas:

• Energy (format for presenting various forms of energyin a common unit);

• Transport (glossary of recommended definitions fortransport statistics);

• Information technology (standardization of statisticalindicators);

• Population and housing censuses (recommendationsfor the 1960, 1970, 1980 rounds of censuses and inpreparation for 2000);

• Housing and building statistics;

• Environmental classification (land, water use; air,freshwater and marine water quality; wastes; environ-mental protection; environmental indicators).

Some of the recommendations were prepared in co-operation with experts from OECD, the EU (Eurostat)and the European Conference of Ministers of Transport.

H. ENERGY

Various elements of an international classification forcoal were drawn up by UN/ECE. This includes interna-tional codification for certain types of coal, internationalclassification of dynamic phenomena in mines and an in-ternational classification of coals in seam. A UniformCode of techniques and equipment specifications fordetermining the weight of bulk coal cargoes was alsodrawn up.

In 1997 UN/ECE endorsed a United Nations Classifi-cation for reserves/resources of solid fuels and mineralcommodities. The classification creates a uniform andconsistent framework. It makes national and regional


classification systems both compatible and comparable.In addition, it enhances communication and provides fora better understanding of the available resources. Over 60countries participated in developing this Classification.Projects on the harmonization of standards and certifica-tions of mining equipment, on harmonization of energyefficiency standards and labelling systems, on an interna-tional codification system for low-grade coal use arecurrently being drawn up.

I. HUMAN SETTLEMENTS

UN/ECE drew up and adopted Guidelines on housing-policy techniques and on land-administration principles.These Guidelines provide analysis and dissemination ofexperience of UN/ECE member States in related areas.They include the UN/ECE Compendium of model provi-sions for building regulations.

J. TECHNICAL HARMONIZATION ANDSTANDARDIZATION POLICIES

UN/ECE Working Party on Technical Harmonizationand Standardization Policies has as its goal to enhanceintraregional cooperation between Governments in stand-ardization-related areas, as well as to facilitate trade andindustrial cooperation through promoting internationallyaccepted standards.

Recommendations to UN/ECE Governments on Stand-ardization Policies

Since 1970, the following 11 recommendations havebeen drawn up and approved:

• Further developments in international cooperation ontechnical harmonization and standardization policies(first version adopted in 1970, amended in 1995);

• Coordination of standardization activities (first ver-sion adopted in 1970, slightly amended in 1988 andagain in 1995);

• International harmonization of standards and techni-cal regulations (new version adopted in 1995, replac-ing previous texts adopted in 1980 and 1970);


• Reference to standards (first version adopted in 1974,amended in 1980, 1984, 1988 and 1995);

• Treatment of imported products, processes andservices (first version adopted in 1970);

• Creation and promotion of international agreementson conformity assessment (first version adopted in1980, revised in 1988);

• Acceptance of conformity assessment results (firstversion adopted in 1988);

• Presentation of UN/ECE recommended standards andharmonized technical regulations;

• Methodological studies and education (first versionadopted in 1970);

• Definitions (amended in 1997);

• Metrological assurance of testing.

The UN/ECE Standardization List (list of sectorswhere the Governments consider it necessary to issueregulations, as the lack of harmonized standards maycreate obstacles to industrial and trade cooperation) isalso updated at regular intervals. The objective is topromote substantial participation by the member Govern-ments in implementing international standards and in theactivities of the competent international standardizingagencies.

IV. USE OF UN/ECE STANDARDS ANDRECOMMENDATIONS

If we look into the UN/ECE activities mentionedabove, from the point of view of standardizers and policymakers UN/ECE has three major types of legal instru-ments which fall under the categories considered here.They are:

• Model contracts and guides;

• International intergovernmental conventions andagreements;


• Recommendations, resolutions on different issues(technical and policy).

Outputs falling under all these groups may or may notcontain technical specifications or other product require-ments (quality tolerance, packaging, etc.). From the pointof view of their application and the obligation of countriesto transpose them, they are mainly different by the waythey are prepared and adopted.

These legal instruments are drawn up by differentgroups (working parties) of experts representing memberStates. They are adopted by a group of experts by consen-sus and are of a voluntary character (i.e. a country is freeto apply them or relevant national standards/rules) withthe exception of conventions which constitute inter-governmental agreements and whose provisions are thusobligatory for country-signatories.

An example of the first type of legal instrument are theactivities of the UN/ECE Working Party on Standardiza-tion of Perishable Produce and Quality Development(WP.7) which elaborates standards for fresh and driedfruits and vegetables, eggs and egg products, cut flowers,meat, etc. These standards are widely used in internation-al trade but a decision as to their use in transactions ismade by business operators who might use entire texts orchange certain provisions of model contracts dependingon the specific needs of clients. Another example of suchUN/ECE contracts or guides are General Conditions forthe supply and erection of plant and machinery for importand export which were prepared by UN/ECE in the late1950s and are still often referred to in agreements withengineering and construction companies.

Usually, the groups of experts that prepare such stand-ards/model contracts or guides do not monitor how andwhere they are used. Nonetheless, from time to timesurveys are carried out with a view to identifying to whatextent their standards/contracts are used in memberStates. Such a survey is currently under preparation, forexample, by the Working Party 7 mentioned above.

The second group of UN/ECE legal, signed instru-ments consists of conventions and agreements which areofficially signed by Governments and provisions whichare binding for contracting parties.


Among the most widely used UN/ECE conventionsand agreements, one should mention the Agreement con-cerning the Adoption of Uniform Technical Prescriptionsfor Wheeled Vehicles, Equipment and Parts which can befitted and/or used on Wheeled Vehicles and the Condi-tions for Reciprocal Recognition of Approvals Grantedon the Basis of these Prescriptions, signed at Geneva on20 March 1958 and including amendments that enteredinto force on 16 October 1995, as well as Conventionsand European Agreements on Road Traffic, on RoadSigns and Signals and/or Road Markings, etc.

The implementation of the Agreement of 20 March1958 (with further amendments to it of 16 October 1995)is being carried on by the UN/ECE Working Party on theConstruction of Vehicles (WP.29). The UN/ECE regula-tions are annexed to, and form part of, the Agreement.

That Working Party prepares new regulations and up-dates the existing ones, in order to follow the wish of thecontracting parties to the Agreement and the developmentof the technology. The regulations by their nature areoptional and countries may choose either to transposethem into their national legislation or to use them inparallel to their national rules or regulations.

The Working Party on the Construction of Vehicleshas six subsidiary working parties (Pollution and Energy;General Safety Provisions; Brakes and Running Gear;Lighting and Light-Signalling; Noise; Passive Safety)which draw up regulations concerning safety, protectionof the environment and conservation of energy. TheWorking Party in general does not set technical require-ments or means to achieve these safety or other targets(technical standards are prepared by ISO technical com-mittees). Regulations agreed on and adopted are volun-tary and countries could choose stricter safetyrequirements rules if they deem that these are necessary.But if a country applies a regulation, this regulation con-stitutes the minimum level of requirements which are tobe met to allow motor vehicles, their equipment or partsto be released on a particular national or internationalmarket. A country applying a regulation (annexed to theAgreement) has an obligation to accept for marketing andoperational use products complying with the said regula-tion.


The original Agreement of 20 March 1958 establishedregulations as agreements between two or more contract-ing parties. After their entry into force, other contractingparties to the Agreement were free to accede and applythese regulations.

Thus, from the point of view of monitoring, the Agree-ment of 29 March 1958 provides for in-built procedureswhich oblige countries to transpose adopted regulationsto which they acceded.

This Agreement, as amended in 1995, provides for anew mechanism. In accordance with the Agreement, aregulation prepared and approved by the Working Party issubmitted to the Administrative Committee of the Agree-ment for a vote (the majority rule applies). This starts alegal procedure; if within a specified period of time(6 months) fewer than one third of the contracting partiesobject, the regulation enters into force for those partieswho did not object to it. If more than one third of the con-tracting parties provide negative responses, then theregulation is rejected.

By declaring application of a particular regulation, thecountry-contracting party to the 1958 Agreement (asamended in 1995) is obliged to accept products supplieddomestically or from abroad and manufactured and type-approved (certified) to this regulation. In their turn, on areciprocal basis, after the approvals have been recog-nized, local manufacturers can export the same type ofproduct to other countries applying the same regulation.The responsibility for the conformity of mass productionwith the type approved lies with the administrativedepartment of the contracting party which issued thetype-approval certificate. Thus, in the case of the Work-ing Party, acceptance of a regulation means, in fact, itstransposition on a national level.

In this area the real situation with regard to the appli-cation of UN/ECE regulations in particular countries (andany deviations from them) is monitored by the Interna-tional Organization of Motor Vehicle Manufacturers(OICA), which regularly publishes information on theapplication of UN/ECE regulations and a register ofspecific national rules.


Under the Convention on Long-Range TransboundaryAir Pollution of 13 November 1979, seven protocols wereprepared and signed in the 1980s and in the 1990s. Theseprotocols contain obligations of countries to control andreduce various hazardous emissions and, in some cases,protocols setting factual (technical) limits of such emis-sions. The compliance with obligations is reviewed everyfive years by an Implementation Committee, assisted bythe secretariat. The latest revision was in 1998 and shouldbe published in 1999 (as ECE/EB.AIR/65).

At the same time, other conventions have provisionswhich are more difficult to monitor and, in this respect,there are more difficulties in checking countries’ compli-ance with them. Thus, compliance with the provisions ofthe Convention on the Protection and Use of Trans-boundary Watercourses and International Lakes isreviewed by the parties every three years at their regularmeetings. As the Convention does not contain numericalstandards, the compliance regime focuses on proceduralaspects of implementing the Convention. Recommenda-tions and guidelines are being developed to assist partiesto the Convention, as well as joint bodies (such as rivercommissions), in the implementation of the Convention.The most recent are the Guidelines on Water-QualityMonitoring and Assessment of Transboundary Rivers;Recommendations to UN/ECE Governments on SpecificMeasures to Prevent, Control and Reduce GroundwaterPollution from Chemical Storage Facilities and Waste-Disposal Sites; and Guidelines on Licensing Waste-WaterDischarges from Point Sources into TransboundaryWaters (Water Series No. 3, ECE/CEP/11).

Other recommendations were published in the WaterSeries No. 2: Protection and Sustainable Use of Waters—Recommendations to ECE Governments (ECE/CEP/10).

By March 2000 (the date of the second Meeting of theParties to the Convention) the following guidelines willbe available: on monitoring transboundary groundwaters,flood prevention, and prevention of water pollution fromindustrial accidents.

As far as the third group of UN/ECE legal instrumentsis concerned, namely, recommendations on technical is-sues, one could mention as an example the followingcommonly used recommendations: consolidated resolu-


tion on facilitation of road transport, which provides interalia for the “green card” insurance system used in Europe(R.E.4); European Code for Inland Waterways (CEVNI)and Signs and Signals on Inland Waterways (SIGNI).

In the area of trade facilitation, a number of standardson the exchange of structured information between com-puters have been drawn up by UN/ECE (United Nationslayout key for trade documents, codes for currencies, formodes of transport, etc.). Within this area one also findsthe UN/EDIFACT (United Nations Electronic Data Inter-change for Administration, Commerce and Transport)standard. This is a constantly evolving standard whichnow includes over 150 types of message. It is used pri-marily by the private sector and administrations. Trackingits use would be a resource-intensive activity.

Recommendations on standardization policies and theECE Standardization List drawn up by the Working Partyon Technical Harmonization and Standardization Policiescould also be classified under this category.

As an interesting example of monitoring adopted reso-lutions and recommendations relating to this group oflegal instruments, reference could be made to the experi-ence gained by the Working Party on Inland Water Trans-port, which continuously monitors use, on the basis ofresponses from Governments, and publishes informationon the application of its resolutions. The latest such reviewis published as document TRANS/SC.3/1998/6.

VI. CONCLUSION

One of the main goals of UN/ECE is to facilitate tradeand investment in the region by assisting Governments inthe policy-making process and by helping business to be-come more efficient in the production and exchange ofgoods, services and information. Hence, the agreed orrecommended standards ought to stimulate trade and in-vestment, rather than act as barriers. Most of the UN/ECEmeetings are open to the business and academic commu-nities, non-governmental organizations and other inter-ested groups. UN/ECE is particularly concerned withintegrating into the world economy those member Statesthat are in economic transition and standard-setting is oneof the areas where UN/ECE supports that process.


CONCLUSIONS OF THE ROUND TABLE ON THEIMPACT OF STANDARDS ON INTERNATIONAL TRADE(Geneva, 15 June 1998)

INTRODUCTION

The Round Table was organized in conjunction withthe session of the Committee for Trade, Industry andEnterprise Development. Participants included repre-sentatives of international and regional standards andstandardizing organizations, national standards bodies,delegates to the Committee, diplomats from Geneva-based permanent missions and private business persons.As a result of the discussions, presentations and dialogueat that meeting, the Round Table adopted the followingconclusions.

THE ROUND TABLE

Recognizing:

1. The substantial contribution that elimination of tech-nical barriers to trade will provide to the internationalexchange of goods and services;

2. The obstacles faced by business operators in their op-erations which are due to different regimes for conformityassessment and standards/regulations in the ECE region;

3. The problems in the ECE region that must be over-come in order to harmonize existing national standardsand practices in line with internationally accepted stand-ards and rules;

4. The special problems faced by transition economiesin their efforts to align their standards with internationaland regional standards.

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Invites ECE member State Governments to consider:

1. Intensifying their efforts to implement and use inter-national standards and regulations and create a transpar-ent and stable framework facilitating the trade andbusiness activities of private operators, whilst keeping thelegitimate interest of health and safety for their citizens;

2. Encouraging initiatives of the Working Party onTechnical Harmonization and Standardization Policies toelaborate concrete proposals for enhancing cooperation inthe ECE region on technical harmonization and stand-ards-related issues;

3. Ensuring close cooperation between relevant govern-mental and international organizations and coordinationof their activities on standardization-related issues, in-cluding in the area of technical assistance to countries intransition, with a view to avoiding duplication of workand waste of resources;

4. Further intensifying business-government dialoguewhenever appropriate and in particular the understandingof standards by businesses and of the needs of businessesby public authorities and standardizers.

Invites the Governments of transition economies to con-sider:

1. Recognizing and promoting the importance and thenecessity of close cooperation and coordination of the na-tional bodies engaged in standardization-related activ-ities, in particular in countries acceding to the WorldTrade Organization or the European Union;

2. Ensuring continuous information to national admin-istrations and economic operators on the importance ofthe use of international standards;

3. Providing necessary financial and political support totheir standards bodies in order to enable them to carry ontheir functions efficiently, as well as supporting the tran-sition towards independent structures in these fields;

4. Improving transparency of the existing nationalframework for standardization and conformity assess-ment activities;


5. Taking measures to ensure that standards bodies intransition economies are sufficiently well equipped withthe necessary skilled staff, and to engage in appropriateactions of recruitment and training when necessary.

Invites Governments of advanced market economies toconsider:

1. Continuing to allocate high priority to standards-related activities in view of their important contribution toeconomic development and cooperation in the region;

2. Taking into account the financial and technical needsof the countries in transition when implementing theirreforms in standards-related areas and to consider pos-sibilities for further technical assistance to transitioneconomies in these areas.

Requests international standards and standardizingorganizations to:

1. Ensure clear separation of functions and areas ofactivities between the standardizing organizations;

2. Put in place mechanisms to determine the extent towhich their standards are actually implemented at nation-al level by their members and encourage measures toenhance such implementation;

3. Create effective means to allow for members fromcountries in transition to participate efficiently in thework of these organizations.

Requests the Executive Secretary of UN/ECE to:

1. Continue to study the issue of the role and impact ofstandards and regulations on intraregional trade and eco-nomic cooperation with a view to suggesting ways andmeans of strengthening and facilitating cooperation onthese issues between ECE member States;

2. Ensure necessary cooperation and coordination withother interested regional and international organizations,in particular on matters affecting countries in transition.

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