Spencer Henson University of Guelph Canada

1. Overview of the Role of Domestic Institutions in Standards-Setting and Testing: Can Goods and Services Comply? Spencer Henson University of Guelph Canada

2. Some Key Messages…….. • Impact of standards on trade is complex • Standards are a strategic issue • Standards capacity is crucial • Have choices in capacity development • Need to be innovative in capacity development

3. Overview • Standards and trade • Standards system • Product and process standards • Standards development • Conformity assessment • Technical and administrative capacities • Private sector strategies • Enhancing capacities • Conclusions

4. Standards and Trade • Incidence of standards • Impact of standards on trade • Strategic response to standards in trade • External inducements to standardization

5. Incidence of Standards • Greater incidence of standards globally • Standards particularly prevalent in industrialised countries • Increased transparency of standards implementation • Greater range of standards being implemented

6. Notifications of Technical Measures to GATT/WTO, 1981-2002

7. Notifications under SPS Agreement, 1995-2000

8. Standards and Trade • Incidence of standards • Impact of standards on trade • Strategic response to standards in trade • External inducements to standardization

9. Impact of Standards on Trade • Many case studies • Few quantitative estimates • Use of proxies: • Border detentions • Cross-notifications • Very partial picture

10. Egyptian Exports of Potatoes to the European Union, 1990-2002

11. Egyptian Exports of Groundnuts to the European Union, 1990-2002

12. Impact of Standards on Trade • Many case studies • Few quantitative estimates • Use of proxies: • Border detentions • Cross-notifications • Very partial picture

13. Food Standards as Barriers to US Food and Agricultural Exports, 1996

14. Impact of Standards on Trade • Many case studies • Few quantitative estimates • Use of proxies: • Border detentions • Cross-notifications • Very partial picture

15. Cross-Notification in SPS Committee, 1995-2003

16. Cross-Notification in SPS Committee, 1995-2003

17. Impact of Standards on Trade • Many case studies • Few quantitative estimates • Use of proxies: • Border detentions • Cross-notifications • Very partial picture

18. EU Import Alerts, 1990-2003

19. US Border Detentions of Egyptian Agri-Food Exports, 2003

20. Reasons for US Border Detention of Egyptian Agri-Food Exports, 2003

21. Standards and Trade • Incidence of standards • Impact of standards on trade • Strategic response to standards in trade • External inducements to standardization

22. Strategic Response to Standards in Trade

23. Kenya Main export Nile perch Majority of exports to EU Exports developed out of traditional local supply chains Public & private sector food safety controls under-developed Sector challenged by excess capacity & input shortages Lack of industry cooperation Faced periods of restrictions totalling over 2 years during 1997-2000 India Main export shrimp More diversified export base Supply chain evolved with export focus from outset Well-established public food safety capacity Private sector food safety controls under-developed Sector challenged by excess capacity & input shortages Well-established industry cooperation Faced a ban for 5 months in 1997 Comparison of Kenyan and Indian Fish Exports

24. Kenya Reform of administrative responsibilities for food safety Wide-scale reform of regulatory & enforcement frameworks Up-grading of processing facilities & controls Investment in up-grading of laboratory infrastructure Evolution of industry cooperation India Reform of regulatory & enforcement frameworks Up-grading of processing facilities & controls Investment in up-grading of laboratory infrastructure Significant restructuring of supply chains Comparison of Kenyan and Indian Fish Exports

25. Comparing the Responses…… • India achieved compliance in 5 months… Kenya took 4 years! • Exporters left the market Reactive exit • Some exporters were advantaged and complied early: Proactive compliance • India made moves to comply from the start: Proactive compliance • Kenya stonewalled and challenged the standards: Reactive voice

26. Standards and Trade • Incidence of standards • Impact of standards on trade • Strategic response to standards in trade • External inducements to standardization

27. External Inducements to Standardization • Trade • International standards • World Trade Organization (WTO): • SPS Agreement • TBT Agreement

28. SPS Agreement • ‘Appropriate level of protection’ • Harmonization • Equivalence

29. Overview • Standards and trade • Standards system • Product and process standards • Standards development • Conformity assessment • Technical and administrative capacities • Private sector strategies • Enhancing capacities • Conclusions

30. Standards System • All activities associated with standardization • Focus: • Public sector • Private sector • Elements: • Regulations, rules & standards • Institutions • Technical, administrative & financial capacities

31. Standards System • Approaches to standardization • Is a national standards body needed? • Forms of standards institutions • Role of standards institutions

32. ‘Traditional’ Approach Key objectives: Weights & measures Health & safety Static structure Domestic focus Public sector activity Regulatory focus ‘New’ Approach Domestic & external focus Extended infrastructure Flexible & dynamic structure Public-private sector activity International recognition ‘Voluntary’ standards Approaches to Standardization

33. Standards and Development • Need for national standards infrastructure • Developing countries do have choices • Need to prioritise standards-related foci • Need to select between capacity-building strategies • Issues and needs highly context-specific

34. One Size Does Not Fit All! • Prevailing scientific/technical/business capacity • Level and forms of industrialization • Level of economic diversity • Importance of export markets • Size profile of industrial sectors • Domestic consumer needs/demands • Country size • Administrative/political structure • Cultural norms.

35. Standards System • Approaches to standardization • Is a national standards body needed? • Forms of standards institutions • Role of standards institutions

36. Alternatives to a National Standards Body • Existing industrial and trade practices • Standards of others: • Neighbouring countries • Trading partners • International standards • Association with national standards body of neighbouring country • Regional standardization activities • Existing organizations

37. Standards System • Approaches to standardiztaion • Is a national standards body needed? • Forms of standards institutions • Role of standards institutions

38. Positioning of Standards Institutions (2000)

39. Standards System • Approaches to standardiztaion • Is a national standards body needed? • Forms of standards institutions • Role of standards institutions

40. Role of Standards Institutions • Establishing standards • Testing • Third party certification • Accreditation • Metrology • Standards information

41. Egyptian Organization for Standardization and Quality Control • Established 1957 • Public sector body: • Ministry of Industry & technology • Sole national authority: • Metrology • Elaboration of national standards • Product certification • Training • Relations with international standards bodies

42. Overview • Context • Standards system • Product and process standards • Standards development • Conformity assessment • Technical and administrative capacities • Private sector strategies • Enhancing capacities • Conclusions

43. Product and Process Standards • Legal basis • Inter-relationships between mandatory and voluntary standards • Content

44. Legal Basis of Standards • Mandatory standards • Voluntary consensus standards • De Facto standards

45. Mandatory Standards • Legal requirements • Promulgated by public institutions • Predominate in areas related to heath and safety • Fall within purview of World Trade Organization

46. Voluntary Consensus Standards • Established through formal coordinated process • Established by range of private organisations • Based on consensus • Voluntary

47. De facto Standards • Uncoordinated process • Market competition • Not mandatory in legal sense • Dominate through gain of market share • Become mandatory through commercial pressure

48. Classifying Standards Mandatory Public Private Voluntary

49. Product and Process Standards • Legal basis • Inter-relationships between mandatory and voluntary standards • Content

50. Inter-Relationships Between Mandatory and Voluntary Standards • In many contexts operate side-by-side • Voluntary standards evolve as mechanism to comply with mandatory standards • Mandatory standards use voluntary standards as reference points • Voluntary standards become embedded in mandatory standards