SABS on Role of Standards & Accreditation in Trade Liberalisation

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Trade and Industry

19 September 2000
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TRADE AND INDUSTRY PORTFOLIO COMMITTEE; ECONOMIC AFFAIRS SELECT COMMITTEE: JOINT MEETING
20 September 2000
SABS ON ROLE OF STANDARDS AND ACCREDITATION IN TRADE LIBERALISATION

 

Documents handed out

Internationalization of Standards within the WTO-TBT Context (see Appendix 1)
SABS Position Paper Regarding the Implementation of a Technical Regulation Best Practice Model for South Africa

Chairpersons: Dr R Davies; Mr M Moosa

SUMMARY
In respect of compliance with international standards South Africa compares favourably to other developing economies.

Policing the SADC region to ensure that they comply with standards was described as ‘’a nightmare’’. The problem is that there is uncertainty as to where the responsibility to do this lies. Presently different institutions are passing the buck, for example the Customs Union passes it onto the South African Bureau of Standards and so on. The uncertainty is expected to continue until the roles of roleplayers are defined by a regulatory regime. Discussions on this issue must take place.

MINUTES
Dr Carolissen made the presentation on behalf of the SABS. The points he made included the following:
- Developing countries must not lower their standards as this would be a retrogressive step. Instead they must bridge the gap between the skills base and international standards.
- Developed economies want to push their own standards as international standards. In this regard the SABS (as a founding member of ISO) looks after the interests of developing economies.
- There must be internationally acceptable certification to show exporters and importers that SA conforms to international standards.
- If there are shortcomings in SA’s conformity assessment system then this will result in re-testing overseas. This adds to the cost of the SA product and the effect will be that SA’s competitiveness will decrease.
- It is important that trends of trade partners be monitored. The WTO agreement on TBT (Technical Barriers to Trade) requires that any proposed technical regulations must be reported to the WTO. The WTO then informs the other WTO members. The SABS is setting up a communication system to ensure that government stays informed and that businesses know what is going on.
- SA has 3500 unique national standards. This is higher than any of the countries in the SADC region.

Discussion
A committee member noted that the South African unique national standards figures were compared mostly to SADC countries. He asked what the position of SA was when compared to other emerging economies such as Brazil.
Dr Carolissen replied that SA compared favourably.

Dr Davies mentioned the potential advantage of strengthening the ISO and commented that a standard is simply a minimum requirement. It does not make one the best. SA’s standards should be above the international minimum in order to give SA an advantage. Dr Carolissen added that one must also ensure that international standards accommodate South African needs.

Dr Davies asked for Dr Carolissen to comment on:
- The role of the SABS as a sub-agent for Europe (in terms of the SABS being a certifying agency for European products),
- Whether technical assistance is provided to SADC countries, and
- The ISO-WTO relationship.

Dr Carolissen confirmed that the SABS is currently recognised by the EU as certificators for certain products. He said that the SABS would like to extend this role to other areas of export.

On the issue of providing technical assistance to SADC countries, Dr Carolissen noted that the SABS is active in SADC structures. In this regard they play a role in various committees, example the SADC subcommittee on standards.

On the ISO-WTO relationship, Dr Carolissen said that the WTO established a subcommittee which identifies standards as a barrier to trade. The ISO also noticed that these trade blocks exist. There is some dynamic between the ISO and the WTO on this issue.

The co-chairperson, Mr Moosa asked if they were policing the standards of products and commodities which are coming into SA. If SA is importing from the SADC countries and the levels of their standards are as low as indicated then that could present a real problem for SA. What is the SABS doing to ensure that the SADC region improves their standards? He also asked if the SABS were offering assistance to industries to improve their standards.

Dr Carolissen replied that policing this is a nightmare because there is uncertainty about whose responsibility it is. This uncertainty will continue until roles are defined by a regulatory regime. The problem at the moment is that different institutions are passing the buck, for example the Customs Union passes it onto the SABS.

Mr Moosa suggested that the roleplayers should meet to discuss concerns around policing. He suggested that Parliament facilitate such discussions if the SABS wished.

In response to Mr Moosa’s second question Dr Carolissen replied that there is such a thing as voluntary standards. This occurs when the industries get together and there is consensus between them on particular standards. If someone then wants to enter the market, they must meet that minimum standard which has been agreed to by the industries themselves.
The SABS has developed training courses for SMMEs. They try to get them accredited and get the SMMEs to understand the standards and to apply them. The problem is that they think it is a waste of money. They want them to understand that if they meet standards then it enhances their competitive position. Thus, a general education process has to take place.

Mr Durr (ACDP) gave the following comments and questions:
- He noted that in the past, SA has had equivalency agreements with countries such as Italy and Germany. The effect of these agreements is that SA standards are considered equivalent to the standards of the country with which the agreement is undertaken. He asked if these agreements still exist.
- He asked for a comment on WIPO (World Intellectual Property Organisation).
- The SABS should be consulted in respect of agreements which come before the Committee, for example the Abuja Treaty which the Committee had discussed that morning. They can then advise the Committee before they make decisions. Mr Moosa agreed with him saying that they needed more integration and more dialogue.

Dr Carolissen could not comment on the bi-lateral trade agreements or on WIPO. He assured Mr Durr that he would find out about this and get back to him. The meeting was then adjourned.

Appendix 1:
INTERNATIONALIZATION OF STANDARDS WITHIN THE WTO-TBT CONTEXT
By Dr. Randall Carolissen of South African Bureau of Standards 20 September 2000

ROADMAP
· Introduction
· WTO-TBT
· Role of Standards in Trade
· Trends in International Trade
· Ramifications for SA
· Implications for regionalisation
· Structural requirements

WTO agreement on TBT
Commits members, SA included, to use international standards and conformity assessment procedures as integral tools for the development of free trade worldwide.

WTO & STANDARDS

· Technical Barriers to Trade Agreement
· Code of Practice for development of Standards
- Time for comment
- Transparency
· Notification of National Programmes for:
- Technical Regulations
- Standards
· Annual Conference on Technical Regulations
- Developing Countries have a say

STANDARDS IN REGULATORY DOMAIN
Current Status & Trends
· Governments need to protect society in a rapidly changing technological market place
· Technical Regulations - Essential Requirements
· Standards - Deem to Satisfy Rules
· WTO/TBT position papers for re-negotiation
- Strengthen use of international standards
- Rule based system enhanced
- Involvement of developing world enhanced

STANDARDS IN REGULATORY DOMAIN
The case for Standards
· Transparent process
· Combines democracy with technological state of the art
· Kept up to date with technological developments
· Cost of production in private sector
· Better reflect realities in the market place
· Easy vehicle to comply with WTO/TBT requirements

Administrative procedures for technical regulations require;
· Imported goods are treated no less favourably than local products
· Do not create unnecessary obstacles to international trade
· Are based on international standards where available
· Exceptions only considered if able to demonstrate for reasons of inappropriateness of climatic conditions, geographic location, fundamental technology or for level of protection of consumer/environment

ISO/TMB BUSINESS PLAN
Environment
· Globalization of markets is increasing need for internationally accepted standards
· Failure to deliver standards in ever decreasing time frames will stimulate alternate structures
· Economic trends are forcing rationalization, flexibility, and responsiveness
· Social trends (e.g. aging, population growth, environmental awareness) are placing new demands on society
· New and emerging technologies require rapid standardization
· Converging technologies (information technology, telecommunications, consumer electronics) are straining traditional delineation of standards organisations
· The regulatory domain progressively making use of standards
· WTO/TBT to be re-negotiated next 3 years

Trends within WTO and ISO 1
· Decrease in tariffs balanced by increased focus on technical trade barriers such as standards, accreditation, conformity assessment and technical regulations
· Promotion of "International Standards by developed economies. SABS as founder member of ISO champion interest of developing world. – Add to competitive advantage
· Pressure to conform to WTO best practice regulatory regime
· Internationally acceptable certification both from import and export perspectives
· Having local ("lower") standards will be retrogressive step Must bridge gap between our skills/knowledge base and international standards requirements

Some perspective
The US department of Commerce estimated that at least $150 billion in US
exports are affected by standards and that they serve as a barrier to trade for
an additional $20 to $40 billion of US exports.

Ramifications for SA Industries
· Price of admission to international trade determined by compliance to standards.
· Shortcomings in SA system of conformity assessment increasingly result in duplicate, time consuming overseas testing that detracts from SA competitiveness
· Effectiveness of regulatory regime govern cross-border flow of trade and investor confidence

Standards scenario in SA
· 5500 National standards published
· ~ 54 Compulsory standards – frameworks of which are in place
· ~250 reference in legislation and hence compulsory, however framework not in place which create tremendous confusion.
SQAM identified shortfall in latter and will be addressed in our recommendations.

SABS WTO Enquiry point
Serves as SA enquiry point under WTO agreement on TBT which require the timely notification of proposed technical regulations that could impact on international trade. Each WTO member is required to report proposed government regulations to the WTO secretariat in Geneva which provides for a 60 day comment period for other WTO members.

Important that trends within trade partners be monitored for timely intervention.
SADC Standards Base
(Information as at May 1999 - PMG Ed. Note: table not included)

WTO-TBT Best Practice Model - PMG Ed. Note: model not included

 

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