U.S. Exports Stymied by National Standards

Government, industry ally to roll back burgeoning standards

U.S. industry and government officials must ally against the international proliferation of hampering trade standards, say government and industry officials.

"This is going to be a huge challenge, and we've just started," said Richard Notebaert, chief of Ameritech Corp., Chicago.

Roughly $150 billion in U.S. exports are affected by the standards, which are devised by governments to guarantee devices' reliability, increase consumers' safety and protect the environment.

However, "these standards can disadvantage U.S. companies, especially small companies," said Stuart Eizenstat, undersecretary for international trade administration at the U.S. Department of Commerce.

For example, Europe and Japan "are achieving an advantage in emerging economies [in Eastern Europe and Asia] by getting those countries to adopt their standards.... [This] has the potential to block U.S. exports," Eizenstat said.

The number of trade standards is also growing steadily, according to a new Commerce Department report, "Towards the Next American Century: A U.S. Strategic Response to Foreign Competitive Practices." For example, a large U.S. computer company had to meet five trade standards in 1991, said the report. But by 1996, it had to meet 16 standards, said the 232-page report, which was released in October.

Although these standards usually restrict trade in manufactured goods, they also hamper the international sale of electronic services, such as telemedicine, said Eizenstat. In 1995. U.S. exports of services reached $208 billion.

To grow the international online commerce business, countries must harmonize their differing national rules on electronic payments, protection for intellectual property rights, the use of credit cards and the licensing of professionals, such as doctors and lawyers, said Notebaert.

According to Eizenstat, services account for 70 percent of the U.S. economy and 20 percent of the $5 trillion international trade business.

Cooperative action on trade-standards by U.S. industry and government "will ensure the United States a leading role on a level playing field in the growing world market for services," he said.

Once the differing national trade standards are harmonized, the international online commerce business "will blossom and explode just like with the [market for] fax machines," said Notebaert.

To combat foreign trade standards, the Commerce Department is coordinating its policy on trade standards with a 20-agency panel and is pressuring other countries to accept mutual recognition agreements. Under the agreements, each country agrees to freely import products that meet the other country's testing and quality-assurance standards.

"We estimate that MRAs can reduce or eliminate 50 to 80 percent of the testing and certification costs that exporters must bear to meet foreign regulatory requirements," according to the Commerce Department report. However, discussions with European officials are deadlocked, said Eizenstat.

Since 1994, U.S. and European officials have drafted five MRAs covering the infotech and telecommunications trade, which account for $40 billion in U.S.-European trade. However, progress has been stymied by disputes over MRAs on medical technology and pharmaceuticals, he said.

In early November, U.S. government and business leaders will meet with their European counterparts to discuss the trade standards, said Eizenstat.

U.S. officials want the Europeans to sign the five completed agreements, but European leaders say they want agreement on all seven areas before approving any MRAs. However, U.S. officials can't wait forever, said Eizenstat. The U.S. may instead choose to establish MRAs with other countries such as Japan, Switzerland and Canada, he said.

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