Global Harmonization of Standards
     
    Salil Deshpande
    Masters of Science Graduate Student
    and
    John W. Nazemetz, Ph.D.
    Associate Professor
    School of Industrial Engineering and Management
    Oklahoma State University
    Stillwater, Oklahoma

    This paper was developed under the Computer Assisted Technology Transfer (CATT) Research Program, Contract Number F34601-95-D-00376, Delivery Order: Engineering Assignment CATT-95-01.

    Table of Contents

    1. INTRODUCTION

    2. WHAT ARE STANDARDS?

    2.1 History of Standards

    2.2 Role of Standards

    2.3 Life Cycle of Standards

    3. NEED FOR INTERNATIONAL STANDARDIZATION

    3.1 Benefits of Standardizatio1n

    3.2 Costs of Standardization

    4. FACTORS AFFECTING IMPLEMENTATION OF STANDARDS

    4.1 Mandatory Standards

    4.2 Obligatory Standards

    4.3 Preferential Standards

    4.4 Business/Marketing Standards

    4.5 Domain Standards

    5. HARMONIZATION OF STANDARDS AND ITS IMPACTS

    5.1 Harmonization of Industrial Data and Product Documentation

    5.2 Disadvantages of Harmonization

    6. INTERNATIONAL, REGIONAL AND NATIONAL STANDARDIZATION ORGANIZATIONS AND BODIES

    6.1 International Standardization

    6.1.1 International Organization for Standardization, ISO.

    6.1.2 International Electrotechnical Commission, IEC.

    6.1.3 International Telecommunications Union, ITU.

    6.1.4 Other International Standardizing Bodies

    6.2 Regional Standardization

    6.2.1 European Standardization Committees

    6.2.1.1 European Committee for Standardization, CEN.

    6.2.1.2 European Committee for Electrotechnical Standardization, CENELEC.

    6.2.1.3 European Telecommunications Standards Institute, ETSI.

    6.2.2 American Standardization Committees

    6.2.2.1 Pan American Standards Commission, COPANT.

    6.2.2.2 The Common Market of the South, MERCOSUR.

    6.3 National Standardization

    6.4 World Trade Organization, WTO and North American Free Trade Agreement, NAFTA.

    6.5 Management System Standards

    7. DIFFERENCE BETWEEN THE EUROPEAN COMMUNITY AND U.S. STANDARDIZATION MODELS

    7.1 U.S. Standardization Model

    7.2 European Community Standardization Model

    7.3 Efforts to Harmonize Transatlantic Trade

    8. CONCLUSION

    REFERENCES

    GLOSSARY

     

     

     

    List of Tables

    Table 1: Major Benefits that can be Attributed to Standards and Standardization

    Table: 2 Cost Factors that can be Attributed to Standards and Standardization

    List of Figures

    Figure 1: Standardization Viewpoint in Corporate Hierarchy

    1. INTRODUCTION

    The changing face of international trade has led to the requirement by manufacturers and processors to have single, globally acceptable technical standards and conformance tests.

    Health, safety, and environmental concerns differ between countries and hence national governments must accommodate them when committing to global standards. The unharmonized national and regional standards increase the cost of doing business. The changing global economy demands that both government and business pay more attention to international standards-related issues and activities16.

    The paper starts with the discussion on the history, role, and life cycle of standards. The need for the existence of harmonized global standards is highlighted and some of the costs and political issues related to having such unique standards are discussed. The paper also covers the factors affecting the implementation and harmonization of standards and summarizes the activities of international organizations engaged in the activity of global harmonization of standards. It also shows the differences in the U.S. and European Community (EC) standardization models and their efforts to harmonize standards to remove the barriers of trade are covered.

    In an effort to enable the reader to know what are the standards and how they are used in our day to day business activities, a glossary of some basic terms related to the standards is included at the end of the paper.

    2. WHAT ARE STANDARDS?

International Organization for Standardization (ISO) defines a standard as

"A document, established by consensus and approved by a recognized body, that provides, for common and repeated use, rules, guidelines, or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context."2

Our industrial society relies on standards; every day we use thousands of standards. This may seem incredible, but the fact is that we unknowingly use them. Millions of pictures are taken every day. The cameras and the films match for all combinations of different manufacturers making them. This interoperation was possible due the agreement between the camera maker and filmmaker to conform to market pressure to establish, accept, and use a standard 35mm format. No law required this agreement, but the market demanded the standard to be honored. The camera is designed to accommodate the film speeds specified by an ISO standard. When a roll of film is sent for processing, it is tagged with header information that helps to return it to the owner after processing. The development of film is done as per the standard specifications on the film canister, and the chemicals used are disposed of as per the approved environmental standard1.

There are approximately 175 organizations that are engaged in preparing standards at the international level. ISO and IEC (International Electrotechnical Commission) have contributed 85% of the international standards. A survey conducted by ANSI (American National Standards Institution) found that there are 89,000 standards in the U.S.A., 88,000 in the U.S.S.R., 18,300 in France, 8,800 in Japan, and 6,000 in Canada10.

2.1 History of Standards

It is interesting to note that the earliest standards were made to enforce honesty among people. Human society has exchanged goods and services on the basis of physical measurement. Unfair dealings and incorrect measurements were resented and systems were developed to enforce honesty.The earliest written standards were for weights. Egyptians developed a standard of measurement called Egyptian royal cubit some 5000 years ago. The basis of this standard was pharaoh's forearm. On a block of black granite approximately 20.63 inches long 6-palms and 24-finger widths were inscribed. It formed the basic measurement standard for pyramids and other great monuments12.

Shih Huang-Ti, the founder of Chinese Empire, and under whom the Great Wall was built, had a design for Chinese unity. He enforced one law, one weight, and one measure to rule out discord and confusion between petty states. His wall stood but his standards for weights and length did not. The standards proposed by the Chinese Emperor were used only for the construction of the Great Wall5. The total length of this wall is 10,000 li (a Chinese unit of length) approximately 5,000 Kilometers. The unit li is no longer used.

Napoleon Wars were among the first set of wars that tried to use standards to competitive advantage. After conquering most of the Western Europe, he noted from captured weapons the incompatibility of ordnance from various countries. Cannon balls were not the same size, weight systems and calibers were unique to each captured army. Napoleon had to attack this problem by the science of measurement called as metrology. The system that developed to assist the Emperor was Le System International d'Unites, or the metric system. He imposed this system on all the conquered and allied nations. This metric system was eventually adopted by all of Europe and exported to all parts of world in the era of colonialism. It is interesting to note that now only the U.S.A. and Myanmar use the English units of pounds and miles7.

2.2 Role of Standards

Standards serve as reference documents that are used in context of contracts or international trade on which the commercial transactions are based. They also represent a level of technical expertise and technology, and are used by the industrialists as the indisputable definitions that simplify and clarify the contractual relations between economic partners.

A standard is a document that is used by jurisprudence to settle disputes. For business partners it serves as:

The role of standards is thus important to all of the business partners. When dealing with business partners in same country, the standards followed are generally the same. This, however, is not true when the business is done globally. The standards and practices followed may differ from country to country. To ensure compatibility of the business partners that are geographically separated, harmonized international standards can play an important role in removing technical barriers to trade.

2.3 Life Cycle of Standards

The life cycle of standards generally comprises seven major phases:

The life cycle of standard has varied length of time. The international standards take a long time because of large number of players involved in decision making. It took ISO 20 years after its inception in 1947 to come up with a standard for cargo containers.

3. NEED FOR INTERNATIONAL STANDARDIZATION

The lack of unique or harmonized standards for similar technologies causes technical barriers to trade. Rationalizing the international trading process requires agreement to harmonize international standards.

Consider the example of internationally standardized freight containers, this standard has enabled all the components of a transport system- railways, air and sea transport, highways, and packages to interface efficiently. The standardized documents accompanying the cargo identify sensitive or dangerous cargoes and makes international trade cheaper, faster, and safer.

Similarly, the ISO film speed code, standardization of the format and size of banking cards, credit cards, and telephone cards, paper sizes (ISO 216), the same symbols for automobile controls in cars all over the world are some other examples of internationally accepted standards. Hence, the standards for similar technologies in different parts of the world contribute to the elimination of technical barriers to trade.

International standardization will continue to grow for all sectors of industrial activity because of its ability to reduce or eliminate the ambiguity in business transactions. Information processing and communication, packaging, textiles, distribution of goods, energy production and utilization, shipbuilding, banking and financial services are some of the diverse fields for which there is well-established international standardization2. ISO identifies the following reasons for international of standardization:

Industry-wide standardization is a condition existing within a particular industrial sector when the large majority of products or services conform to the same standards. It is a consensus agreement reached between all economic players in that industrial sector. The economic players (suppliers, users, and often governments) agree on specifications and criteria to be applied consistently in the choice and classification of materials, and the manufacture of products. The aim is to facilitate trade, and the exchange and transfer of technology through: International standards provide confidence in products and services to the users. This assurance of conformity can be provided by manufacturers' declarations, or by audits carried out by independent bodies.

3.1 Benefits of Standardization

The benefits realized by the use of international standards can be summarized in terms of tangible and intangible benefits in the following Table 1.
Tangible Benefits
Intangible Benefits
  • Reduce cost of specifying parts, materials, processes, and recurring technical requirements. 
  • Reduce paperwork and record keeping in purchasing, quality assurance, inventory control, etc. 
  • Obviate the need for qualification testing of product. 
  • Reduce capital investment in inventory, warehouse and special equipment. 
  • Reduce warehouse-operating costs. 
  • Develop cost estimates more economically. 
  • Reduce the time required to train the persons or vendors using the standards. 
  • Reduce time required to get a new design into production. 
  • Reduce frequency of technical errors of judgement. 
  • Provide a common language between design and manufacturing (buyers and sellers). 
  • Increase productivity and efficiency in manufacturing. 
  • Improve quality based on accepted and explicit specifications. 
  • Improve reliability through consistency from process rationalization and repetition. 
  • Improve user and customer confidence. 

Table 1: Major Benefits that can be Attributed to Standards and Standardization 12

3.2 Costs of Standardization

The benefits listed in Table 1 have associated costs. Some of the cost factors associated with benefits are intangible and cannot be quantified. These intangible costs are difficult to quantify in terms of money or manpower. If we credit standardization with the benefits summarized in Table 1 we should also be aware of the costs associated with them. These costs are summarized in Table 2.
Tangible Cost Factors
Intangible Cost Factors
  • Arriving at a decision on appropriate standardization action. It includes several consensus meetings held between the prime players in this action. 
  • Documenting the standardization action. 
  • Implementing and enforcing the action. 
  • Operating the standards program. 
  • Maintaining the internal standards. 
  • Monitoring and participating in the external standardization activities. 
  • Marginally increasing the cost for some items. 
  • Constraining the freedom of choice. 
  • Restricting innovation particularly in design. 
  • Providing common denominator solutions that may be optimized for current needs. 
  • Weakening a company's position in the marketplace by standardization features that had differentiated the company's products. 
  • Simplifying entry of competitors into a market where user requirements have been defined by standards. 
  • Continuing use of obsolete standards because of industry inertia. 

Table: 2 Cost Factors that can be Attributed to Standards and Standardization 12

Persons responsible for standardization activities consider the contributions of standardization to the common good are sufficient justification to avoid any detailed analysis of costs associated with these efforts. The management perspective is different for such standardization programs. The management expects lower costs and greater profits from standardization activities. The unit of measurement for management is money. The management expects reduction in variety of parts, materials, and purchased goods. It further expects reduction in inventory investment and faster throughput.

The standards personnel have a different view, they are more concerned with the technical aspects and physical characteristics of a project. The term return on investment (ROI) has different meaning for top management and standards personnel. This difference can be seen in Figure 1.

Figure 1: Standardization Viewpoint in Corporate Hierarchy12

The ROI for top management is defined as:

Moreover, the ROI for standardization is defined as:

The managers of standardization must realize this difference in viewpoints and provide a link between top management and standards personnel.

A mature standards operation in a medium-technology manufacturing company will realize a 7:1 ROI annually, a high-technology industry shows a standardization ROI ranging from 10:1 to more than 20:1……Companies just beginning a standards operation can realize even larger ROIs because relatively small investments of standardization resources, if properly applied, can reap very significant benefits. 10 The reason for higher ROI is the faster development and application of complex parts, materials, and processes by the industries. The standardization helps to reduce variety of parts and processes used for operations and justify the ROI on standardization.

4. FACTORS AFFECTING IMPLEMENTATION OF STANDARDS

To an extent, all companies incorporate some standards in their implementation whether this is done formally or even unknowingly. In some cases, however, implementation is not a discretionary decision. External factors such as laws or trade practices can reduce a company's decision alternative from a discretionary choice to that of mandatory conformance. Sometimes to avoid unnecessary risks, the implementation becomes a strategic necessity.

To identify the significance of external factors that predetermine if choice exists with regard to implementation of the standards, we will classify the external standards into two groups. The two groups are:

Required standards are the standards that are followed or adopted due to mandatory legal requirements or market pressures. Optional standards are not mandated by law or market but the company decides to adopt them based on perceived benefits such as ease of operations or increasing market acceptability. The following mandatory standards are the type implemented in order to do business in various geographic regions and with various technological partners.

4.1 Mandatory Standards

Some standards have become embodied in the law. When legislation mandates some attribute of a product must conform to a standard, the standard defining that requirement must be implemented by all. There are no options when laws mandate standards. These mandatory standards can apply to products, manufacturing practices, testing, packaging, transportation, and qualifications of operators.

Illustrations of mandatory standards are the Federal Communications Commission (FCC) rules. Manufacturers and users of radio equipment do not have the freedom to choose the frequency of transmission, the mode of operation, or the transmission power of radio equipment. Many FCC rules embody and assure compliance to international regulations, such as the radio regulations of International Telecommunication Union, a specialized agency of United Nations. Similarly, many Federal Aviation Administration (FAA) requirements assure compliance with the international standards and recommended practices of the International Civil Aviation Organization. The mandatory standards do not prevent business from being conducted without conforming to the standards, but failure to comply may be an unwanted risk6.

4.2 Obligatory Standards

Standards that are the part of a contract are also among those that predetermine the implementation of standards into a company's operations. If a company has a contractual obligation to provide a product in accordance with some standard, under contract law that company must implement that standard. In many industries, terms based on standard practices govern many transactions and are contained in the boilerplate in the purchase orders and contacts to invoke conformance to the standards in the industry. For example, in the electrical manufacturing industry, boilerplate terms in purchase orders and contracts often state "in accordance with NEMA standards," invoking obligation to the letter and tradition of applicable National Electrical Manufacturers Association Standard6. Thus, contracts frequently obligate companies to conform to certain standards. NEMA has undertaken two projects to develop tri-national standards for circuit breakers and fuses. NEMA is working with Canadian Standards Association (CSA), Mexico's National Association of Standardization and Certification of the Electrical Sector (ANCE), and Underwriters Laboratories Inc. (UL) to successfully harmonize the existing North American standards for these products. In addition to this, NEMA has been producing the DICOM (Digital Imaging and Communications in Medicine) series of standards in consultation with the European Committee for Standards (CEN) technical committee for medical informatics, the Japan Industries Association of Radiation Apparatus (JIRA), Institute of Electrical and Electronic Engineers (IEEE), and the ANSI, thus facilitating future adoption of the standards by those organizations and bringing order to the marketplace.

4.3 Preferential Standards

Preferential standards are those optional standards that a company has chosen to adopt in toto, or reference in its internal (often-proprietary) standards. The list of potential standards for adoption as preferential standards is as vast as the body of standards itself. A company may choose certain national aerospace standards or military standards as its documentation in applying and purchasing fasteners, coaxial cables, or other products. Test methods in accordance with ASTM (American Society for Testing and Materials) or federal standards may be called out as references in company's design or manufacturing standards. For example, a company may decide to use only zinc-coated fasteners based on some military standard. This use of zinc-coated fastener is not mandated by any code or law but the decision to adopt it is discretionary. These preferential standards are also the pools of reference standards from which the company may draw technical information and technology6.

4.4 Business/Marketing Standards

Consumers have come to expect minimal levels of performance, quality, and durability for each variety of products. The expectations are supported by commercial and consumer protection law. If the purchaser uses a product in accordance with the manufacturer's instructions and warnings about improper use, the purchaser can expect that use or consumption will not be harmful or damaging. In situations in which customers anticipate fulfillment of specific attributes of a service or product, a company often finds the basis for these attributes in standards. For example, the "Nutrition Facts" written on eatables is required as per mandatory Food and Drug Administration (FDA) standards but the contents, like fat content are attributes that affects customers acceptance. Recognizing which particular subset of attribute anticipation affects customer and market acceptability and viability is an essential task of sales strategists. Any company that fails to implement the product features anticipated by its customers does so at considerable risk. These expectations are reflected in standards so, to some extent compliance to standards is essential to the consumer acceptance of products. Therefore, business/market standards tend to be automatically adopted by producers and reflect user expectations6.

4.5 Domain Standards

When a standard prescribes requirements for all items within a class of products, the standard is referred to as a domain standard. Often, domain standards address safety issues common to a class of products.

Implementation of domain standards for a product requires awareness of product membership in the domain and determination of the applicable domain standards. For example, in the electrical industry, a product standard will require that a particular device be capable of interrupting a certain electrical current, whereas the domain standard will prescribe the method for establishing the space between the current-carrying elements of all such devices. A company could build a satisfactory current-interrupting device and not have a salable product because of inadequate spacing between the current-carrying elements.

In conclusion, it can be said that the company will implement standards that are needed in order to conduct business within the market. Hence, the implementation of standards by a company is not fully discretionary.6

The companies implement standards that are needed in order to conduct business within the market. This process of implementation of standards needs to be performed only once if adapting to persistent, internationally acceptable global standards. Subsequent upgrading of applicable standards can always be done once standards are adopted. Existence and forming of internationally harmonized standards will reduce these efforts and shall benefit the companies that want to expand their base from a regional to an international arena. The various international institutions and bodies engaged in the activity of providing global harmonized standards are discussed in next section.

5. HARMONIZATION OF STANDARDS AND ITS IMPACTS

ISO defines harmonized standards as standards on the same subject approved by different standardizing bodies, that establish interchangeability of products, processes, and services, or mutual understanding of test results or information provided according to these standards.

For the most part, the purpose of harmonized standards is not so much to achieve identical regulations or standards, but to converge international methods for developing and administering standards. Such approaches include pre-market harmonization, mutual recognition, equivalency, and reference standards. These approaches have been applied mostly to product standards (particularly for food and chemicals), and are primarily trade promoting.10

Product standards set criteria for the design, content, operation, and disposal of products to minimize health and safety or environmental damage. Because they are interactive, health and safety standards and environmental standards sometimes overlap--as in the case of pesticide use, which leaves residues in food and drinking water. Generally, environmental product standards try to prescribe, within various tolerance limits, the physical or chemical properties of a product and determine what the maximum permissible pollution emissions are. Examples include the limits on contaminants in food products, noise standards for consumer appliances, and permissible emissions from automobiles.

Pre-market harmonization relates to the coordination of administrative procedures for review, approval, or registration of products before they reach the market. Pre-market harmonization is practiced, for example, in the Organization for Economic Cooperation and Development (OECD) Chemicals Program, which coordinates commonly accepted procedures for chemical safety testing before it authorizes product marketing. This has resulted in the development of guidelines for testing chemicals, the establishment of principles of good laboratory practice, requirements for a pre-marketing set of data, and the agreement of rules on the mutual acceptance of data. Pre-market harmonization is also designed to converge the risk assessment process with the evaluation of data from the harmonized testing procedures. This can hasten agreement on the criteria for identifying the potential adverse health and environmental effects of a product or process. Despite the soundness of this approach, countries may still differ significantly in their perceptions of risk and the levels of risk they will accept in connection with a product or process. This in turn makes trade disputes possible. 10

With mutual recognition, products lawfully manufactured and sold in one country may enter other countries, which broadly implies the mutual acceptance of one another's standards. Mutual recognition does not try to harmonize standards as much as it tries to ensure the free flow of goods across borders. The most far-reaching application of the mutual recognition and acceptance approach is in the food trade within the European Community. Member states can maintain national product standards, but they cannot prevent the sale within their own boundaries of products that meet the standards in other EC member states. The only exception to this is when the invocation of the national standard is necessary to protect the public health and the consumer. The advantage of mutual recognition is that it can remove trade impediments arising from less essential standards and thus allow harmonization efforts to focus on narrower and better-defined set of standards. However, applying mutual recognition to a broad range of environmental standards and to countries with wide divergences in environmental preferences is not likely to be successful. 10

Equivalency assumes that if two different standards have an equivalent effect, then a country should allow goods to enter its market based on these standards. Equivalency affords the same degree of protection to each country, but allows regulations or standards to be quantitatively different. It has the advantage of recognizing the different circumstances under which countries protect their consumers and environments, while at the same time recognizing the different conditions and factors that influence standard setting. Equivalency, for example, is an important element in the US-Canada Free Trade Agreement. The two countries have sought an open-border policy with respect to trade in agricultural and other designated goods, basing that policy partly on "making equivalent" technical regulations and standards. The agreement's chapter on agriculture includes accords to make equivalent and to harmonize, where possible, testing and evaluation procedures, labeling requirements and residue tolerances for certain chemical products. However, there may be considerable national differences of opinion as to whether different standards provide an equivalent guarantee of health and safety protection or environmental protection. For this reason, methodologies for measuring equivalency and dispute settlement procedures are needed.10

The most comprehensive approach to harmonization is to establish, through multilateral bodies, internationally accepted reference standards for products and processes. For example, the draft GATT Decision on Sanitary and Phytosanitary Measures directs countries to base their sanitary and phytosanitary measures on existing international standards, guidelines, or recommendations. It recommends increased reliance on international standards organizations: the Codex Alimentarius Commission (a joint World Health Organization/Food and Agriculture Organization agency), the International Office of Epizootics, and the International Plant Protection Convention. Countries can adopt standards more stringent than those set by these organizations if they can show a scientific justification for doing so. There is also some allowance for higher standards if they are based on internationally agreed-upon risk-assessment techniques. Arriving at reference environmental standards is difficult because of the ongoing debate about whether such standards should be ceilings or floors for specific national regulations. National differences in establishing standards higher than the international norm and in giving relatively more weight to science or risk assessment can lead to significant disputes.

Harmonization reduces the non-tariff barriers posed by testing and certification of products and the administration of standards. The private sector promotes harmonization of product standards, because it is expensive for producers to diversify products enough to meet the requirements of different importing countries. And uniformity of products usually benefits consumers.

Harmonization of environmental ambient and process standards also yields trade advantages. Such convergence keeps the costs of complying with different national regulations from modifying the relative industrial competition in international trade. It helps neutralize inter-country differences in environmental regulations and the shifts in foreign investment from varying environmental costs. Regulatory and cost differences allegedly promote environmentally unfriendly foreign investment, reducing job opportunities at home and creating pollution havens abroad.10

5.1 Harmonization of Industrial Data and Product Documentation

ISO 10303, Standard Exchange for Product Data (STEP), is being developed by a broad range of industries to provide extensive support for modeling, automated storage schema generation, life-cycle support, plus many more data management facilities. ISO 8879, Standard Generalized Markup Language (SGML), and the SGML family of standards, including HyTime and Document Style Semantic and Specification Language (DSSSL), is used for modeling and encoding the documentation of industrial products, many of which are produced using STEP.There are technical differences between STEP and SGML as well as differences in their application and spheres of enterprise. For example, STEP is used during the early stages of product development, e.g., design, testing, whereas SGML is more commonly applied during the latter processes of a product's life cycle.The STEP standard task group, Product Documentation (ISO 184/SC4/WG3/T14) is currently tasked with the responsibility for creating a methodology for the cooperation of the STEP and SGML standards.15Organizations that create products are also creating product documentation. Documentation usually starts being compiled at the time the product is being designed and developed. However, this design and manufacturing documentation is often not used in the final user/operations oriented product documentation. And frequently, it is not even used in the development of this documentation. The reasons for this can be many, but a main factor is that the user documentation is typically developed at the end of the product development cycle. At this time, the engineers who developed the product are usually involved with other product developments and are not available for the technical writers who create the technical documentation. The design and manufacturing documentation is most frequently in data formats that are inaccessible to the technical writers, e.g., CAD/CAM data, parametric models etc.It would be a great support to the writers of the final product documentation if they could efficiently access the documentation and notes generated during the design, development and manufacture/implementation of a product. The larger the amount of product documentation that is available from the front-end phases of the product development cycle, the greater the benefit to the final documentation.The engineer(s) who are developing a product are the most knowledgeable individuals about that product and are in the best position to supply information about the product. Information created by the engineer(s) is more likely to be accurate. 15Another aspect is that information about design decisions, testing results, etc. can be required later in a product's life, e.g., by various authorities. Harmonizing the data types between the early design documentation and the final user documentation can make the archiving and retrieval infinitely easier.

However, these efforts do not try to eliminate technical writer. The technical writer will still add value to the documentation. The information will still require expert writers and editors to provide the technical documentation to the end-user in a meaningful and understandable format.15

5.2 Disadvantages of Harmonization

Environmentalists most often enumerate the disadvantages of harmonization. Harmonization of product standards may lead to lower levels of environmental protection through the "lowest common denominator" effect. And environmentalists find fault with harmonization of ambient and process standards because of the variations in environmental endowments and national environmental preferences. For reasons of both ecology and national sovereignty, environmental policies and standards will differ from country to country, reflecting each nation's relative situation and their collective choices.

Nevertheless, an environmental imperative for harmonization does exist, and stems from emerging global and trans-boundary pollution and resource problems. Cooperative efforts addressing global warming, stratospheric ozone depletion, preservation of biodiversity, and similar problems will involve more harmonized international environmental policy approaches. These efforts will no doubt be based on increased convergence of product standards, ambient standards, process standards, economic instruments, and life-cycle management approaches. Processes such as pre-market harmonization, mutual recognition, equivalency, and reference standards will play a role. Multilateral attempts to redress and prevent damage to the global ecosystem will require a substantial array of policy instruments and harmonization methods.

The new global consciousness will feed the trend toward identifying the environmental character of products in terms of their entire life cycle from production to disposal. Such initiatives will put into question the definition of "like product" under international trade rules. Numerous issues have already arisen when trade restrictions, either unilateral or multilateral, are linked to the standards under which a product is made or harvested. Yet in the long term, given the worsening state of the global environment, discrimination against traded products on the basis of production method is probably inevitable.

This will pose new challenges for harmonization, as well as new and difficult questions for the multilateral trading system. In the future, the purpose of harmonization will be twofold: to preserve the global environment and to facilitate global trade. Designing harmonization processes that balance trade and environmental objectives to optimize overall social welfare will not be an easy task. Because harmonizing environmental policy instruments and evaluating their legitimacy in trade disputes are difficult tasks, institutional and procedural questions are extremely important. It is generally agreed that the GATT is not the appropriate forum for setting or harmonizing environmental standards, yet it currently has sole responsibility for determining the legitimacy of these standards when they are challenged under multilateral trade rules.

Environment-trade disputes will become more complicated as harmonization of international environmental policies continues. New dispute settlement mechanisms will be crucial to balancing the environment and trade facets of harmonization. New international approaches to harmonization (beyond the ad hoc treaty approach), new institutional arrangements for implementing and monitoring harmonized policies, and new mechanisms for resolving the inevitable disputes. Current mechanisms are geared to resolving problems relating to the harmonization of product standards for trade reasons. As the purpose of harmonization changes from trade facilitation to environmental preservation, new ways of thinking about trade and environment relationships are essential.10

Another disadvantage of harmonization is the fact that it moves the decision making away from accessible and accountable state and national standard making bodies to international bodies that are largely inaccessible to citizens and generally operate without accountability to those who must live with their decisions.

Harmonization would be acceptable only in area with the explicit goal of strengthening public health, natural resource conservation, worker safety and other standards. Harmonization mandates in the context of trade agreements are especially troubling given that their primary goal is maximization of trade flows through the elimination of all barriers to trade, including some legitimate public health, economic justice or environmental laws which may limit some trade. For instance, if applied to imported food as well as domestically-produced food, a ban on commerce in food containing carcinogenic residues is viewed as a trade barrier.

We will highlight the efforts taken by various international, national, and regional standardization organizations for making globally harmonized standards in Chapter 6 of this paper.

6. INTERNATIONAL, REGIONAL AND NATIONAL STANDARDIZATION ORGANIZATIONS AND BODIES

Standards are developed and used at international, national, and regional levels by a host of organizations. Common structures and cooperative agreements can ensure the coordination of the work at the three levels. This aim of the coordination can provide common and non-overlapping standards for the various technologies, which will enable free trade among the economic trade partners of the various levels.

6.1 International Standardization

The following sections describe the international standardization bodies that are engaged in the activity of providing global standards for economic trade. Each of these standardization bodies specializes in particular technical areas.

6.1.1 International Organization for Standardization, ISO. International Organization for Standardization was founded in 1947; ISO is a worldwide federation of national standards bodies, currently comprised of over 125 members, one per country. The mission of ISO is to encourage the development of standardization and harmonization of standards in the world in order to facilitate international exchange of goods and services and to achieve a mutual entente in the intellectual, scientific, technical and economic fields. Its work concerns all the fields of standardization, except electrical and electronic engineering standards, which fall within the scope of the IEC (International Electrotechnical Commission). ISO has over 2,800 technical work bodies (technical committees, subcommittees, working groups and ad hoc groups). ISO has published over 11,000 International Standards.2

6.1.2 International Electrotechnical Commission, IEC. International Electrotechnical Commission was founded in 1906, the IEC is responsible for international standardization and harmonization in the fields of electricity, electronics and related technologies. Its charter embraces all electro-technologies including electronics, magnetics and electromagnetics, electroacoustics, telecommunication, and energy production and distribution, as well as associated general disciplines such as terminology and symbols, measurement and performance, dependability, design and development, safety, and the environment. IEC's members, which currently number over 50, are national committees, one from each country are required to be fully representative of all electrotechnical interests in the country concerned. National committees obtain a large measure of support from industry and are normally officially sanctioned by their governments. IEC is working with national standardization bodies in Europe, NEMA in America, and Japanese standardization bodies to harmonize the standards. The IEC has published over 4,500 standards. Both ISO and the IEC have central offices in Geneva, Switzerland, and operate according to similar rules.The transposal of ISO and/or IEC standards into the national collections is voluntary.2

6.1.3 International Telecommunications Union, ITU.

The International Telecommunications Union was formed in1865. A specialized agency of the United Nations since 1947, ITU membership currently includes over 400 sector members. ITU international recommendations are developed in the fields of both telecommunications and radio-communications. ITU headquarters are located in Geneva, Switzerland. Similar to the efforts of IEC, ITU is also taking initiative to harmonize standards in Europe and America.2

6.1.4 Other International Standardizing Bodies

A large number of international organizations are in liaison with ISO and IEC and participate to varying degrees in their work. Several of these organizations have standardization activities in their own area of interest, which are recognized at the international level. In a number of cases, the results of the standardization work of these organizations are fed directly into the ISO/IEC system and appear in International Standards published by ISO or by IEC.2

6.2 Regional Standardization

The regional standardization bodies in different parts of the world that play important role in the harmonization activities of international standardization bodies are listed below. The European and American standardization bodies are listed the following paragraphs.

6.2.1 European Standardization Committees

CENELEC (European Committee for Electrotechnical Standardization), CEN (European Committee for Standardization) and ETSI (European Telecommunications Standards Institute) are the three important European standardization organizations. They prepare European standards in specific sectors of activity and together the three of them make up the European standardization system.

Most standards are prepared at the request of industry. The European Commission (EC) can also request these bodies to prepare standards in the context of the implementation of European Community legislation. This is known as standardization work "mandated" by the Commission in support of the legislation. The products manufactured in accordance with these standards benefit from a presumption of conformity with the essential requirements of a given directive.2

6.2.1.1 European Committee for Standardization, CEN. European Committee for Standardization was founded in 1961, CEN draws up European standards and regroups 18 European standards institutes. CEN has witnessed strong development with the construction of the European Union. Its headquarters is located in Brussels, Belgium.

A Technical Board is in charge of the coordination, planning and programming of the work which is conducted within the work bodies (technical committees, subcommittees, working groups), the secretariats of which are decentralized in the different EU member states. CEN, which counts over 250 technical committees, has published some 2,400 documents, including 2,100 European standards. Over 9,000 documents are under study.

The efforts of CEN are to develop standards for EU and also takes part in removing transatlantic barriers of trade by cohesively working with American standardization bodies to harmonize technical standards.2

6.2.1.2 European Committee for Electrotechnical Standardization, CENELEC.

European Committee for Electrotechnical Standardization was founded in 1959 and is a non-profit-making organization under Belgian Law located in Brussels, Belgium. CENELEC is responsible for standards in the field of electrotechnical sector. It performs the same functions as CEN. Its members are working together in the interests of European harmonization since the late fifties, developing is parallel to the European Economic Community (EEC). CENELEC works with 40,000 technical experts from 19 EC and EFTA (European Flexographic Technical Association) countries to publish standards for the European market.2

6.2.1.3 European Telecommunications Standards Institute, ETSI.

ETSI develops European standards in the telecommunications field (ETS, European Telecom Standard). Its headquarters are at Sophia Antipolis, France. ETSI has 400 members (administrations, operators, research bodies, industrialists, users) representing over 30 countries (EU, EFTA, Eastern Europe).

Although the functions of CENELEC, CEN and ETSI are precisely defined, they inevitably overlap in a number of fields, such as the machinery sector or the sector of information and communications technology (ICT), which is situated at the crossroads between information technology, electronic components and telecommunications networks.

CEN and ISO (International Standardization Organization) have signed an agreement on technical co-operation, called the Vienna Agreement. ETSI and ITU (InternationalTelecommunications Union) are constantly in contact.CENELEC and the IEC (International Electrotechnical Commission) operate at two different levels but their individual actions have a strong mutual impact since they are the most important standardization bodies in the electrotechnical field. Cooperation between CENELEC and the IEC is described in what is known as "the Dresden Agreement" since it was approved and signed by both partners in Germany in September 1996. This agreement intends to expedite the publication and adoption of International Standards, to ensure rational use of available resources, consideration of the content of the standard taking place at international level, and to accelerate the standards preparation process in response to market demands.2

6.2.2 American Standardization Committees

The following sections describe some of the important standardization organizations on the American continents. The activities performed by these organizations are described these sections.

6.2.2.1 Pan American Standards Commission, COPANT.

COPANT is a non-profit association. It has complete operational autonomy and unlimited duration. The basic objectives of COPANT are to promote the development of technical standardization and related activities in its member countries with the aim of promoting the industrial, scientific and technological development in benefit of an exchange of goods and the provision of services, while facilitating cooperation in the intellectual, scientific and social fields.The Commission coordinates the activities of all institutes of standardization in the Latin American countries. The Commission develops all types of product standards, standardized test methods, terminology and related matters. It is an umbrella regional organization for American countries, which promotes the development of technical standardization and related activities in its member countries. It ensures that standards uniquely relevant to its member countries are developed by internationally recognized agencies, and it encourages harmonization of technical standards. COPANT headquarters are in Buenos Aires, Argentina.2

6.2.2.2 The Common Market of the South, MERCOSUR.

It is known by either its Spanish acronym MERCOSUR, or its Portuguese acronym MERCOSUL. MERCOSUR is a common market made up of the economies of Argentina, Brazil, Paraguay and Uruguay. Its principle objectives are to improve the economies of its member countries by making them more efficient and competitive and by enlarging their markets and accelerating their economic development by means of more efficient use of available resources; to preserve the environment; to improve communications; to coordinate macroeconomic policies; and to harmonize the different sectors of their economies. MERCOSUR's permanent headquarters are in the city of Montevideo, Uruguay.

6.3 National Standardization

Each country possesses its own national standardization system. The central or most representative national standards body participates within the regional or international bodies. At the national level, standardization work is generally conducted by standards committees, which can obtain assistance from groups of experts. These committees or working groups are made up of qualified representatives of the industrial circles, research institutes, public authorities, consumer or professional bodies.At the regional or international level, technical committees for the secretariats conduct the work and the national standards bodies assume the responsibility for standardization activities like making draft standards, feedback from representatives of the industrial circles, research institutes etc. These technical committees are created by the technical management boards of the relevant regional or international bodies. All national members are entitled to represent a forum on the international or regional committee dealing with a specific subject matter.

6.4 World Trade Organization, WTO and North American Free Trade Agreement, NAFTA.

The last negotiations of the GATT (General Agreement on Tariffs and Trade) Uruguay Round gave birth to the WTO, which was established on 1 January 1995. As of 1 January 1998, there were 132 members (central governments). The Agreement on Technical Barriers to Trade (WTO TBT) is one of the 29 individual legal texts of the WTO Agreement that obliges members to ensure that technical regulation, voluntary standards and conformity assessment procedures do not create unnecessary obstacles to trade. Annex 3 of the TBT Agreement is the Code of Good Practice for the Preparation, Adoption and Application of Standards. In accepting the TBT Agreement, WTO Members agree to ensure that their central government standardizing bodies accept and comply with this Code of Good Practice and agree also to take reasonable measures to ensure that local government, non-governmental and regional standardizing bodies do the same. The Code is therefore open to acceptance by all such bodies.

The TBT Agreement recognizes the important contribution that international standards and conformity assessment systems can make to improving efficiency of production and facilitating international trade. Where international standards exist or their completion is imminent, the Code of Good Practice says that standardizing bodies should use them or, least, the relevant parts of them, as a basis for standards they develop. It also aims at the harmonization of standards on as wide a basis as possible, encouraging all standardizing bodies to play as full a part as resources allow in the preparation of international standards by the relevant international bodies.

The North American Free Trade Agreement (NAFTA) and WTO constitute permanent institutional structures that have significantly increased the power and impact of globalization. Currently numerous harmonization negotiations are under way. Both NAFTA and the WTO established new committees to develop uniform international standards and to promote harmonization of domestic food safety and technical standards, which include all non-food standards such as those pertaining to natural resources, product safety, or automobile pollution. NAFTA also established numerous committees to harmonize auto, truck and highway safety and hazardous transportation rules and both agreements set up harmonization committees for banking, insurance and other services sectors. Under NAFTA and the WTO, specific international standard-setting bodies, such as the ISO and Codex, are given the task of setting presumptively-permissible global standards. NAFTA and WTO provisions obligate member countries to participate in harmonization talks in these areas. Industry groups have initiated some private harmonization efforts since the passage of NAFTA and the WTO. The Transatlantic Business Dialogue, the International Conference on Harmonization (ICH), and numerous international trade associations negotiate about standardizing their nations' regulations. They then either invite governments to participate at a later date, or present their final results for government acknowledgment. The WTO and NAFTA also pressure member governments like the United States to base their domestic standard making on international standards and on international standard-setting techniques.

Another mechanism of harmonization is equivalence determination. Under the notion of "equivalence," significantly different, often lower, standards from other countries can be declared equivalent to U.S. domestic standards. NAFTA and the WTO provide for equivalence determinations based on subjective comparisons without clear procedural guidelines or enumeration of the factors to consider. Once a foreign standard is declared to be "equivalent," it must be treated as if it were a US domestic standard. Under this policy, countries accept other countries' standards and allow free passage of goods declared equivalent to domestic standards.17

6.5 Management System Standards

Recent years have seen the development and application of what are known as "generic management system standards", where "generic" means that the standards' requirements can be applied to any organization, regardless of the product it makes (or whether the "product" is actually a service activity), and "management system" refers to what the organization does to manage its processes. Two of the most widely known series of international standards falling into this category are the ISO 9000 series for managing quality systems, and the ISO 14000 series for environmental management systems. Wide ranging information and assistance related to these standards and their application is available from the ISO7.

The arrival of the quality and environmental management standards, ISO 9000 and ISO 1400, have accelerated the market liberalization. Compliance with these standards ensures quality of production and helps businesses in developing countries to compete effectively in the international arena.

7. DIFFERENCE BETWEEN THE EUROPEAN COMMUNITY AND U.S. STANDARDIZATION MODELS

7.1 U.S. Standardization Model

The system of standards development is decentralized in the U.S., there are hundreds of standards development bodies in the U.S. There is also a dichotomy between standards developers representing professional societies and those representing trade associations. The number of private sector organizations involved in standards development in the U.S. is more than 600. The differences in viewpoints and objectives among major private sector standards-development organizations in the U.S. have sometimes made it difficult to arrive at a unified position. This difference in opinions also made it difficult to reach consensus on the appropriate role to be played by government. Hence, the U.S. system is often described as pluralistic, sometimes fragmented, ad hoc and market-driven16.

7.2 European Community Standardization Model

The European Community (EC) model has significant government influence. It is a closed system and integrated at both national and regional levels. The participation in formal standards development activities at the regional level is limited to authorized representatives of European national standards bodies.

The regional standards bodies of Europe, European Committee for Standardization (CEN), European Committee for Electrotechnical Standardization (CENELEC) and European Telecommunication Standards Institute (ETSI) have been contracted by the Commission of the European Communities to develop standards in support of EC legislation. Regional standards in Europe preempt national standards, and are given preferential status under EC legislation. Products that conform to European standards are presumed to meet EC essential requirements. The European Community model is hence called as monolithic, integrated, formalistic and policy-driven16.

7.3 Efforts to Harmonize Transatlantic Trade

Transatlantic Business Dialogue (TABD) is a unique business driven approach to significantly reduce the tariff trade barrier between the US and EU. It has provided a new paradigm for trade liberalization by providing a faster and more consensus-based method than traditional government to government negotiations.

The primary goal of TABD is to eliminate the trade barriers that result from standards and regulatory requirements, including duplicative product testing, redundant standard certification, and differing technical regulations. Such barriers provide no value- added protection to workers and consumers, it only adds to the costs to producers and customers. The ultimate goal of TABD is to fulfill the principle "approved once, accepted anywhere in transatlantic market." 9

Harmonization of standards and regulations to reduce the trade barriers is a prerequisite to achieve this goal.

8. CONCLUSION

The need for existence of single global standard for all the technologies is a desirable objective for all the economic partners. The harmonization of standards removes the barriers of trade and help the manufacturers to use the facilities all over the world and the customers in turn get quality goods and services at lowest costs.

However, this global standardization is not an easy process. It took ISO 20 years after its inception in 1947 to come up with a standard for cargo containers. Every country or region follows some form of standard for all its activities but they differ from each other in some respect. The technologies for which there is no globally harmonized standard, the national standards and/or regional standards are followed. The differences between standards can be small or very large and cause difficulties in adapting to a different standard.

The cooperation among the various economic players and the customer demands will help in achieving the global harmonization of standards. It may take several years or decades, but the inevitable fact is that we will progressively move towards globally harmonized standard for technologies. It would be beneficial for the companies to adopt the standards that have a prospect of becoming harmonized global standards and this foresight can be obtained by actively participating in standardization technical committees. The participation in such activities will enable the companies to review their internal standardization process and the feedback received from them would make the transformation from one standard to the one developing into a globally harmonized standard gradual. This would reduce the heavy burden on investment for transforming into any other standard.

REFERENCES

  1. Cargill C.F. (1990)"Justifying the Need for A Standards Program". Standards Management a Handbook for Profits, ANSI, N.Y.
  2. International Organization for Standardization (ISO). http://www.iso.ch/infoe/(2/18/99)
  3. Lundvall B.A. (1995) "Standards In An Innovative World". Standards, Innovation and Competitiveness, Edward Elgar, Aldershot, UK.
  4. Overview of Manufacturing Systems Environment project. http://www.mel.nist.gov/msidlibrary/doc/sima-study/bakstud1.htm (1/30/99)
  5. Perry J. (1955) "The Story of Standards" New York Funk and Wagnalls Company.
  6. Reimer R.H. (1990)" Factors Affecting Implementation of External Standards" Standards Management a Handbook for Profits, ANSI, N.Y.
  7. Ritterbusch G.H. (1990)"Functions Of A Standards Program". Standards Management a Handbook for Profits, ANSI, N.Y.
  8. Standards, University of Michigan Media Library. http://www.ummu.edu/library/STANDARDS/(2/18/99)
  9. Stern P. "The Transatlantic Business Dialogue: a New Paradigm for Standards and Regulatory Reform Sector-by-Sector" http://www.tabd.com/resources/content/stern/html(6/12/99)
  10. Stevens C. (1993)"Harmonization, Trade and the Environment" International Environmental Affairs http://www.ciesin.org/docs/008-062/008-062.html(6/9/99)
  11. Sullivan C.D. (1983)"Standards and Standardization". Dekker, New York, N.Y.
  12. Toth R.B. (1990) "Getting Standards Implemented" Standards Management a Handbook for Profits, ANSI, N.Y.
  13. Toth R.B. (1990) "Managing the costs of Standardization" Standards Management a Handbook for Profits, ANSI, N.Y.
  14. Toth R.B. (1990) "Profiles of Company and National Standardization Activities." Standards Management a Handbook for Profits, ANSI, N.Y.
  15. Tucker H. (1997)"SGML Documentation Objects within the STEP Environment" http://www.eccnet.com/papers/(6/20/99)
  16. Warshaw S.I. and Saunders M.H. (1995) "International Challenges in Defining the Public and Private Interest in Standards". Standards, Innovation and Competitiveness, Edward Elgar, Aldershot, UK.
  17. "International Harmonization of Social Economic and Environmental Standards"
http://www.citizen.org/pctrade/harm/(06/19/99)

GLOSSARY

"The various actors involved in the daily business of standardization on the broad front of industrial activities have never gone out of their way to make it easy for laypeople to comprehend what this business was about. Oceans of acronyms and coded language have always proven effective barriers to outsiders, and standards-related discussions have seemed forever doomed to be conducted by faceless technicians in secluded locations."3

In our effort to relate the jargon of the terms related to standards and standardization process we have included the following definitions of these terms. These definitions have been adapted from ANSI (American National Standards Institute) and EIPSC (Engineering and Information Processing Standards Council of the National Bureau of Standards now the National Institute of Standards and Technology: NIST).

  1. Code: a collection of mandatory standards, which has been codified by a governmental authority and thus became a part of the law for the jurisdiction represented by that authority. (EIPSC). The ASME (American Society of Mechanical Engineers) Boiler and Pressure Vessel Code is a mandatory standard for pressure vessels in U.S.A.
  2. De Facto Standard: a standard which has not been promulgated and adopted but has come into use by general acceptance, custom, or convention; may or may not be described in a published document.(EIPSC)
  3. Harmonized Standard: standards on the same subject approved by different standardizing bodies, that establish interchangeability of products, processes, and services, or mutual understanding of test results or information provided according to these standards. (ISO)
  4. Industry Standard: a standard developed and promulgated by representatives of an industry for materials and products related to that industry. An industry standard is generally oriented towards the industrial or institutional consumer and represents a consensus of the industry regarding the nomenclature, identification, standard sizing, and material, design, or performance specifications for materials and products of that industry.(EIPSC)
  5. International Standard: a standard adopted by an international standardizing/ standards organization and made available to the public.(ISO)
  6. An international standard promulgated by treaty organization like United Nations Food and Agricultural Organization is generally mandatory and a standard promulgated by non-treaty organization like ISO is not mandatory. However, it is generally in the interest of the using party to abide by such standards.

  7. Mandatory Standard: a standard with which there is an obligation to comply by virtue of an action by government or by an authority endowed with the necessary legal power; called code, regulation, or rule. In addition to how a product must conform, a mandatory standard usually prescribes who must implement the standard, to what products the standards apply and under what conditions, and when conformance is required. It may also prescribe how conformance is to be established and may define exemptions and deviation procedures and may impose penalties for non-conformance. (EIPSC).
  8. National Standard: a standard that is adopted by a national standards body (like BSI, the British Standards Institution in UK) and made available to the public. This standard may or may not be mandatory.
  9. Normative Document: a document that provides rules, guideline, or characteristics for activities or their results. (ISO). It is a generic term that covers documents such as standards, technical specifications, codes of practice, and regulations.
  10. Performance Standard: a standard which prescribes the acceptable functional or operational characteristics of a material, product, or system, related to the circumstances of use to which the performance applies; includes or references the test methods by which these characteristics are measured. (EIPSC)
  11. Proprietary Standard: a standard developed by a common interest group and not generally promoted for the use by public. Company standards are generally considered to be proprietary standards. (EIPSC).
  12. Specification: a set of conditions and requirements, of specific and limited application, that provides a detailed description of a procedure, process, material, product, or service for use primarily in procurement and manufacturing. Standards may be referenced or included in a specification.
  13. Voluntary Standard: a standard established generally by private sector bodies and that are available for use by any person or organization, private or governmental. A standard usually developed by a consensus process for voluntary use and with, which there is no obligation to comply. However, it may become mandatory as a result of its use, reference or adoption by a regulatory body.