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EC Standards Setting, Certification, and Testing Processes: Roles and Implications for U.S. it&D-Intensive Industries DR. AMBLER: The subject of this session has been referred to a num- ber of times already. Mr. Pandolfi stated that he thought standards and technical regulations were among the most important factors to achieving the Common Market, and in fact he said that he and others had believed that for a long time and had already made quite a lot of progress, particularly in telecommunications, with respect to standards for terminal equipment. Of course, those of us who have been connected with standards-setting and testing procedures have known for a long time that they are essential for market integration and an efficient marketplace, but we have also known that they could be used as selective barriers to integration. That point was emphasized by Professor Bromley. The speakers on the panel today are going to discuss topics such as the importance of transparency and openness, the avoidance of costly duplicative testing for conformance, timely notification of proposed regulations and standards, and various other issues of concern to those interested in standards and similar regulations. We have two speakers from the EC and two speakers from the United States. The first speaker is Jean-Pierre Contzen, who is director general of the Joint Research Center of the European Community. Mr. Contzen is by training a mechanical and electrical engineer and had postgraduate studies in nuclear physics at the University of Brussels. Past positions include, first, the Ministry of Defense at the Belgian Nuclear Research Center at Meaux, then as engineer in reactive studies, head of the reactor dynamics group, and head of the section for advanced projects. In 1964 he became senior engineer for future programs directorate of the European Launch and Development Organization and worked on many applications of nuclear power In space. 76

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 77 At the same time, he was also consultant to the Nuclear Energy Agency of the OECD in Paris. He transferred to the ESRO in Paris and was a successful mission manager for telecommunications satellites, assistant director for space applications, and director for telecommunications. In 1974 he joined the CEC as director for prospective studies for the Joint Research Center of the ESPRIT establishment. Subsequently he was director of programs of the Joint Research Center at Brussels. In 1981 he became director of science and technology policy coordination with third countries for the Di- rectorate General for Science, Research, and Development, and in 1986 he assumed his present position. DR. CONTZEN: In the present session, dealing with standards-setting, certification, and testing processes, I intend to concentrate my remarks on the upstream part of the entire process, that is, on the interaction between research and standards. I will focus more specifically on the case of new materials, which represent in my view a very good example of how this interaction can be organized, and I will examine its international implications. Research and standards: Distant neighbors or good partners? Replying to this question a decade ago I would have been inclined to choose the first- distant neighbors. For a long time, standards makers had a limited awareness of what was going on in the research world and what might be of relevance to them. For many decades, standardization could be efficiently achieved by ensuring that good practices were progressively agreed to and codified, the standardization occurring after market penetration and being in many cases aimed at demarcating market shares. With the notable exception of basic metrological standards of time, mass, electricity, etc., the academic world displayed little or no interest in descriptive standards-related work. It was considered an indignity for a true scientist, and only a few research managers in traditional industries were aware of the potential benefits of such work. That situation is changing radically. The acceleration of the technologi- cal innovation process, the subsequent requirement for shortened innovation cycles, the increased cost of developing new products and processes, the growing importance of high-technology products to ensure industrial com- petitiveness, the prospect of the European Single Market, the need for eliminating nontariff barriers at the international levelall have brought new requirements for standards during the premarket phase, particularly in high-tech areas. This in turn necessitates early linkage between research and standards-making . . . activities. No fixed list of such areas could be established in view of the evolving character of the technological scene and the movements of the market. Nevertheless, one may indicate a stronger need in fields such as biotechnologies, telecommunications, advanced materials, lasers, membranes, and advanced production techniques as well as in more conventional sectors such as food and construction.

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78 EUROPE 1992 An agreement ex ante on standards avoids the implementation of diverg- ing solutions that would have little chance of converging at a later stage. This is particularly true for complex systems, which require at least some convention for the organization of such systems. Furthermore, standardization during the premarket phase creates a momentum for new products and pro- cesses, by promoting the right degree of consensus for wider use of innovative concepts; it ensures quicker and wider development of new technologies, accelerates market penetrations, and gives more assurance of end-use per- formance. One should note at this juncture the advent of a new element in the technological innovation process, in the penetration of new processes or products into the market that is, the element of societal acceptance, beyond strictly technical and economic factors. Compatibility with the environ- ment is beyond any doubt a growing factor in determining this social accep- tance. Product safety is rapidly becoming a sensitive public issue. This requires assurance of protection by rigid, credible standards. Hence, standards that take into account societal constraints such as respect for the environment at the premarket stage could greatly accelerate market introduction. The evolution of the situation I have just described must bring distant neighbors together and transform them into close partners. Proposals for standards should in the future involve more research work; conversely, an enhanced transfer of the results of research to the standardization process should be organized. Hence, the advent of a new class of research- prestandardization, now known as prenormative, research, which can be defined as research aimed at providing the scientific, technological, and metrological bases for the preparation of agreed standards on products or processes, in general born of advanced technologies. Prenormative research is not an area of research in itself. It is more a new dimension in research, horizontal in nature, having a bearing on several areas. The importance of this prenormative dimension has been stressed in the new Framework Program of Community activities in the field of research and technological development for 1990-1994: ". . . in order to guarantee the scientific and technical basis to establish adequate norms and standards, this approach being likely to facilitate the completion of the Single Market and to provide a response to the Community's increased responsibility in the fields of environment, health and safety." The Industrial R&D Advisory Committee of the CEC has constantly drawn attention to the need for further action in the area of prenormative research. During 1990 IRDAC is organizing a number of workshops to discuss the concept of prenormative research in three selected fields: con- struction, food processing, and adhesives. These workshops, bringing together representatives from the private and public sectors and from European standards organizations, are aimed at demonstrating the importance of prenormative

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 79 research for European industry and encouraging the Commission to take, if appropriate, further action in this field. Many research programs already include this dimension; ESPRIT, RACE, the nuclear fission safety research program, and the environmental research program constitute good examples. I would nevertheless use the example of advanced materials, and more especially advanced ceramics, to illustrate how an efficient interaction between research and standards-setting work can be organized. More than in many other areas, the design engineer accustomed to tradi- tional practices will not shift to the use of new material until he has received some assurance that the new materials will bring some functional or economic advantage. He needs, in particular, the assurance of consistent performance and service before he will have the confidence to switch from the traditional materials. This assurance can be built through the provision of advanced specifications on the performance of the new material. Therefore, there is clearly a strong connection between the rapid introduction of new materials on the market and the early existence of standards of performance. In advanced ceramics at the European level prenormative work has been organized since 1987 and involves four components: pressure from alert industries in close conjunction with Commission services, in this case the Joint Research Center; organizations concerned with the definition and agree- ments on standards, regrouped in CEN; laboratories and test houses providing testing, calibration, and analytical services, verification of conformity to standards, validation, and certification; and, finally, public and private research organizations and research laboratories from industry. Figure 2 shows how this prenormative work can be organized. It starts with a state-of-the-art analysis of developments in advanced ceramics, car- ried out by research organizations and industries. This leads to an inventory of standards requirements, which in turn leads to a request for action by the CEN. In this case the CEN responded by setting up a technical committee (TC-184 Advanced Technical Ceramics), which through various subgroups has formulated a standards work program to be implemented within the CEN framework. Meanwhile, in close consultation with this CEN technical committee, on the initiative of the Commission's Joint Research Center, actions were initiated by BCR. BCR is run by the Commission of the EC, in close association with national testing laboratories, such as the National Physical Laboratory in the United Kingdom or the Physikalisch-Technische Bundesanstalt in Germany. These BCR actions are aimed at investigating requirements and proce- dures for testing various types of ceramics, leading through round-robin exercises to the elaboration of testing methodologies. Such actions, together with the needs arising from the standards work program, would lead to the formulation of new research requirements of a prenormative type, to be

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80 R&D on advanced ceramics Inventory of Standards Requirements and Priorities l State-of-the-Art Analysis Request for Action by CEN CEN Standards Work Programme 1- 1 1~ Work on Testing ~ | Prenormative Methodologies _- Research :~ Requirements FIGURE 2 Standards Setting in Prenormative Research: Advanced Ceramics. EUROPE 1992 Agreed Published Standards (ongoing or new cycle) implemented by the public and private sectors and, finally, to the formula- tion of agreed published standards. After three years of effort and adjustment, one might claim that the system works in a coherent fashion and that collaboration has been achieved between researchers and standards makers. At least in this particular case, distant neighbors are becoming good partners. Could such a scheme, experimented with at the European level, be applied at the international level, particularly in the framework of U.S.-EC rela- tions? The answer is yes, as far as the research is concerned. Because of its prenormative character and the desirability of internationally accepted norms and standards, its output should be made widely accessible to all firms as well as to all institutions that are involved in standards-setting work. Recognition of this fact has been the basis for the launching and subsequent very efficient operation of an international project called VAMAS. At the 1982 meeting of the Economic Summit powers at Versailles as Dr. Rembser will certainly remember a working group on technology growth and employment was set up to consider the problems presented by technologies in relation to economic growth and employment. It was also to submit ideas on how to explore the many opportunities presented by the new technologies, noting in particular the requirement to remove barriers and promote the develop- ment of trade in such new technologies. The United Kingdom, in the person of Sir Robin Nicholson, then chief scientist at the Cabinet Office, together with the United States, in the person of Dr. George Keyworth, then science advisor to the president, spearheaded a proposal for multilateral collaborative research on advanced materials and standards, which was subsequently selected and implemented. This was the origin of VAMAS, which after seven years of operation is still very active.

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 81 The Versailles mechanism as a whole has faded away; some projects achieved their short-term aims, but some projects among the 18 initially selected are still going on, not for the sake of bureaucratic self-perpetuation but because they respond to an effective need. All G7 countries are involved in this effort, as well as the Commission of the EC. The VAMAS organization is a very light one, with practically no bureaucracy. The alternating chairmanship and the secretariat are assumed for the time being by the U.K. National Physical Laboratory. The U.S. member of the organization is NIST. The work is conducted on a flexible basis, with each participating member using existing resources. In other words, the work-sharing principle has been adopted for this type of collaboration. VAMAS aims at stimulating, by means of international collaborative projects, the generation of agreed standards and codes of practice for advanced materials. VAMAS is not intended as a standards-drafting body. It is essentially a supportive body aimed at providing the enabling technical base and sophisticated information that will accelerate the production of interna- tionally agreed standards. The technical working areas of VAMAS are listed below: TABLE 1 Wear test methods Surface chemical analysis Ceramics Polymer blends Polymer composites Superconducting and cryogenic structural materials Hot salt corrosion Weld characteristics Materials data banks Creep-crack growth Efficient test procedures for polymer properties Low-cycle fatigue Technical basis for an unified classification system for advanced ceramics As one can see, the scope of the collaboration embraces all agreed as- pects of enabling science and technology data bases, test methods, design methods, and materials technology which are required as precursors to the

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82 EUROPE 1992 drafting of standards for advanced material. Collaboration is emphasized in prestandards measurement research, intercomparison of test results (mostly by round-robin exercises), and consolidation of existing views and priorities for standardization action. To get a view on who participates in VAMAS, Tables 2 and 3 give as examples the participants in round-robin tests on superconducting materials and cryogenic structural materials. You see that if academic institutions, research organizations, and testing laboratories predominate, industry is nevertheless present rather strongly in the case of Japan, much more tim- idly in the case of Europe and the United States. To conclude, I would like to submit for your consideration the following reflections. There is an objective need for closer links between researchers and standards organizations; industry should be part of this rapprochement. Progress has already been made in this direction, but further efforts are needed. The distant neighbors should gradually become good partners. Particular attention should be given to the prenormative dimension of research activities. Finally, experience in specific cases such as VAMAS has shown that international collaboration in the field of prenormative research is not only feasible but also beneficial, if it relies on interested, strongly motivated partners, and if it is focused on very well specified technical areas hence the suggestion that we might, in selected areas, consider the implementation in common of new VAMAS-type projects. DR. AMBLER: The next speaker is Dr. Ivan Dunstan, president of the European Committee for Standardization. Dr. Dunstan had been director general of the British Standards Institute since 1986, having joined that organization as director of standards in 1983. His scientific training is in materials and quality assurance. He has been director of the Department of the Environments Building Research Establishment and is currently involved in standardization, testing, and quality assurance over a wide range of tech- nologies, including mechanical and electrical engineering as well as building and construction. DR. DUNSTAN: There is no shortage of information, but I believe there is still a good deal of misunderstanding, and perhaps even misinformation, about what is going on in Europe and the reasons for it. My remarks will concentrate rather more on the practicalities of what is happening, how far we have got, where we are going, and particularly how important we feel it is that all of you and other interested countries around the world do participate as fully as possible in the activity. There is no doubt about the level of interest. Only two weeks ago there was a major conference in Brussels for non-Community countries. Over 50 countries from around the world were represented. The level of interest was quite remarkable. The common theme, of course, was to ensure that

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 83 TABLE 2 Participants in the Round Robin Tests on Superconducting Materials c Measurement AC Loss Measurement Europe Atominstitut der Osterreichischen Universitaten (Austria) Institute for Experimental Physics, Osterreichischen Universitaten (Austria) SCK/CEN (Belgium) SNCI, CNRS (France) KfK (Federal Republic of Germany) Siemens (Federal Republic of Germany) Vakuumschmelze (Federal Republic of Germany) ENEA, Centro di Frascati (Italy) Universitat Nijmegen (the Netherlands) Clarendon Laboratory (United Kingdom) Rutherford Appleton Laboratory (United Kingdom) United States Brookhaven National Laboratory Francis Bitter National Magnetic Laboratory Lawrence Livermore National Laboratory NIST University of Wisconsin Japan Electrotechnical Laboratory Furukawa Electric Company JAERI Hitachi Kobe Steel NRIM Osaka University Tohoku University Toshiba Atominstitut der Osterreichischen Imoversotatem (Austria) Alsthom DEA (France) KfK (Federal Republic of Germany) Siemens (Federal Republic of Germany) Universitat Twente (the Netherlands) Clarendon Laboratory (UK) Battelle Memorial Institute Brookhaven National Laboratory NIST Center Research Institute for the Electric Power Industry Electrotechnical Laboratory JAERI Jyushu University Nihon University NRIM Tohoku University

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84 TABLE 3 Participants in the Round Robin Tests on Cryogenic Structural Materials EUROPE 1992 Tensile Measurement Fracture Toughness Measurement Europe Technische Universitat Wien (Austria) KfK (Federal Republic of Germany) EMPA (Switzerland) Rutherford Appleton Laboratory (United Kingdom) United States Lawrence Livermore National Laboratory Materials Research Engineering, Inc. NIST Teledyne Engineering Service Japan Hitachi JAERI Kawasaki Steel Kobe Steel Nippon Kokan Nippon Steel NRIM Tohoku University Toshiba University of Tokyo KfK (Federal Republic of Germany) NIST Hitachi Kobe Steel NRIM Tohoku University Toshiba University of Tokyo what was happening was a contribution to global trade and did not lead to any kind of fortress Europe. In this conference we have just crossed a bridge from research and de- velopment into standardization. As you heard from the chairman, I have worked on both ends of that bridge, and I crossed from research to standardization about seven years ago. To set the scene for this session on standardization, I would like to go back to the fundamental statement in the Treaty of Rome that started a good deal of what we are talking about today: "The European single market is 'an area without internal frontiers in which the free move- ment of goods, persons and capital is ensured."' That is the very simple objective set down in the Treaty of Rome a number of years ago. It was not addressed forcefully until about the mid- 1980s, when it really began to receive attention. Of course, the achieve- ment of that objective should be of great benefit to all the different nations

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 85 of Europe, but there has been great concern from other countries, that achieving it would, in fact, tend to isolate Europe from other trading partners around the world. Much of that concern has focused on the subject I have been asked to talk about: standards, testing, and certification. Standards traditionally have been drawn up to help communication, to help reach technical agreement about design and production and delivery, but it is also a fact that countries around the world, including European countries, have used them as quite effective barriers to trade. The idea has been to harmonize standards and to reach arrangements for mutual recogni- tion of testing and certification, so that those barriers would disappear between European countries. There was certainly no wish to create new barriers between European countries and other trading partners around the world. In fact, what is happening in Europe with regard to standardization, testing, and certification is aimed at breaking down national barriers and at moving increasingly toward international agreements. European work starts with international agreements and adopts them when- ever possible. If they are not in place, then we have to do some new work, and as soon as possible, that new work is fed into the international arena. All the time we are trying to break down national frontiers for the purposes of free and fair trade. It says nothing about competition. The more efficient company will still get the business; the higher-quality product is more likely to achieve its place in the market. But at least the common standards and the methods of testing and the arrangements for certification will, we hope, be harmonized as far as the European market is concerned. That is the target. Two major policy declarations have sent us down this road, starting in 1985 with a "New Approach to Standardization and Technical Harmonization" and more recently with the 1989 policy declaration called a "Global Approach to Testing and Certification." This is very new and I will spend some time on it later; the policy is going to be developing quite rapidly during the current year. The New Approach directives set out what are called essential requirements, written in general terms, relating to health, safety, or environmental matters, consumer protection, and so on fundamental safety requirements where government has a legitimate interest. Those essential requirements are described in the New Approach directives in a very general way. There is no attempt, as happened in the past, to write all the technical requirements into the directives. It is fairly easy to change a technical standard, but it is quite difficult to change a legal instrument like a directive, so the New Approach directives set down very simple requirements, and the details are filled out with European standards. Those European standards are voluntary documents, drawn up essentially by European industry and by their customers in the marketplace, through

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86 EUROPE 1992 the process of voluntary standardization. They provide guidance on the best way to meet the essential requirements. Anyone can choose other ways if they wish, but the best defense if you get into trouble is to show that you followed the European standards. Products that meet those requirements, as described in the European standards, will carry the CE mark, which simply means that the product meets the essential requirements, usually for safety, health, environment, consumer protection, set down in the directives. The CE mark enables the product to enter all the countries of the Community and indeed all the countries of EFTA. That is the simple basis on which the New Approach to directives has been designed. I want to answer a question I am often asked and that is: We have national standards, we have international standards. Why do we need another level between, of European standards? Why is it necessary? Why should we have this regional standardization? The answer is perhaps the most important feature of what is going on. It is simply that by reaching certain agreements, which I will mention in a moment, the 12 countries of the Community and six countries of EFTA a total of 18 countries in western Europe have agreed to accept those standards as their national standards. Every country will withdraw its existing technical material and put those standards in place. If that document is already an international standard, we have 18 countries that accept it as a working document to support their trade. If the work is not in place internationally, then we shall have a new document that is in use in 18 countries and that will immediately be offered for international adoption. What we are doing here is really a very supportive action in relation to international standardization. What is driving the approach to European standardization? The first driving force is the directives that result in what are called Commission mandates to the European standards organizations. A mandate is a Brussels' word for a work order. The Commission asks for a program of standardization to support each directive, and these come to the European standards bodies, are approved by the technical boards, and go into the program. Second, there is an instrument called the Information Directive 1983, which is a way of capturing and recording all the national standards work that starts in Europe. The idea here is to intercept national work, and, if it is appropriate, see that it is done at the European level. It is another way of swinging the emphasis away from national technical activity into European or international technical activity. It is a declaration of national work with the possibility that it may be challenged and it may become European or even international. We have heard a great deal about the need for new technologies to have their standardization support in place at an early stage. There was a good example yesterday of computer integrated manufacturing, where develop- ment could not proceed until there was agreement on standards. We heard

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92 EUROPE 1992 standards- IEC and ISO standards are going to be the basis for European norm standards. The United States can and does participate in that process through the EC connections of those two groups, so the opportunity is there for us to influence the process indirectly and get our opinions considered. Let us move on to the certification area. One basic goal of the EC is mutual acceptance of certification within the Community. Now, does that mean that acceptance will apply to the Americans who get certification in EC systems on the same basis as it applies for the Europeans? The answer, I think, is yes. Realistically it is not necessary, not practical, to have identical systems in the EC and the United States. What is perhaps more important is that we have access on the same basis and that we go through the same requirements and same conformity assessment procedures as those applied to the European manufacturers. So the major area of concern for the United States has been access, and I think we are moving in the right direction in that, and with the development of the EOTC, perhaps we will get further clarifications. The key to all the certification procedures is contained in the directives; since Dr. Dunstan covered that, I will not spend too much time on it. I will tell you basically that since the Single European Act became effective in July of 1987 about 150 directives have been adopted and about another 130 are under consideration. Directives have been issued in some of the key areas where I know we have a lot of exporting activity from the United States, and there are many, many more. Taking the issue of directives a step further, it is important to understand the distinction between essential requirements and standards. It is the key here, especially from your perspective. Directives, as they are designed, contain general requirements relating to health, safety, and environmental concerns and consumer protection. They are to be used in a way that allows more innovation, more introduction of new technology, because they do not hold a manufacturing community or an industry or a private individual to a specific way of designing the product. You do not have specific criteria that you must live with, you have either the option of going for the broad requirements and meeting the essential necessities or of going for specific standards that are developed through CEN and CENELEC, which operate under contract from the EC. This, I think, will introduce innovative prac- tices and new technologies in an easier way. Obviously the burden of demonstrating equivalency rests with the industry or the manufacturer, but the opportunity is there, and that is a good development. The most critical factor is determining compliance with the requirements, be they essential requirements contained in directives or specific standards issued by CEN and CENELEC. How does an American manufacturer do that? There are several ways of doing it, and a real innovative concept that perhaps is going to be more helpful than not is a process called declaration

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 93 of conformity. Under this process, permitted by several directives, manu- facturers can declare conformity on their own. How do they do that? They can use either the CEN or CENELEC stan- dards, make sure that the performance criteria are met, do testing to evalu- ate that. Make sure the construction requirements are met, make sure the labeling and other general requirements are met, document that, and if everything proves to be acceptable, you can, on your own, declare conformity. Or you can use the essential requirements out of the directives, and use not only European norm standards but perhaps other standards U.S. standards, other national standards and demonstrate equivalency. So you do have that declaration of conformity option, but before exercising that option, you must do one additional thing. The testing laboratory in which the data are created must be accredited to the EN 45000 series norms. These are basically good laboratory practice requirements, and they are used to assess the operations of testing laboratories and to accredit the laboratories, be they of notified bodies or of the manufacturer. The same criteria apply to both sectors. Additionally, the manufacturing plant must go through the quality assessment process, following the EN 29000 series norms adopted by the EC. So the manufacturer will have to demonstrate quality conformance in addition to complying with the EN 45000 good laboratory . . practice guide. After that has been done, the individual company is able to apply the CE mark. A key point to note here is that for many product sectors the CE mark may not be adequate by itself. True, it is a passport to the European Community countries, but for those products for which third-party certification has traditionally been required, and where it has been mandated by the directive, the mark of the notified body or the other body involved in the testing and certification of that product may have to be applied. What does it mean, than, this declaration of conformity path? Does it mean that the third parties will be bypassed? Does it mean that the notified body situation is going to deteriorate and NBs (notified bodies) will not be used? A logical answer is perhaps no, because there are many reasons that the third party or notified-body process will have to come into play. Certainly, manufacturers will be on safer grounds going through a third-party unbiased opinion and declaration based on that. There are certification procedures that exist right now, because until directives are adopted by the member states, you must live with the certification policies of the countries and, at least in the interim period, those procedures must be complied with. Lastly, the CE mark may not be acceptable in all cases, as we mentioned. Some directives require involvement of notified bodies, quality assessment procedures, and factory inspections. Some validation of that has to take place, so use of NBs will still continue, at least in some capacity. I under- stand, and perhaps you can verify, that a separate directive on marks is

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94 EUROPE 1992 coming; I suspect it will be here before the year is out, but I am not sure. That would give us some further guidance on the labeling and marking of products. Let me switch to another area of interest that is critical to United States industry. Here I use Underwriters' Laboratories as an example, but certainly we are not the only method by which this is done. If U.S.-based certifiers and testing agencies are not to be notified bodies and it appears that way right now another option is available reciprocal agreements or subcontracting agreements with European-based testing labs and certifiers. It is under- stood, at least at this time, that the EC thinking right now is that these will be continued to be accepted. In regulated areas there will be requirements and criteria that will have to be met, and EC approval will be needed. But in nonregulated areas the subcontracting and bilateral agreements that exist or do get developed in the future will be accepted without EC review and control, and I think that is good news. As developments go forward and the EOTC is developed and we under- stand what the participation criteria are for U.S. industry, both in regulated and nonregulated product sectors, I think we will have a much clearer picture. Hopefully, we will gain some of that understanding via our delegation that is planning to go there next week, so we will come back more educated. Finally, I would like to conclude by saying that EC 1992 is a positive development, positive for Europeans and certainly positive for U.S. manufacturers if the guidelines and rules are properly developed and do not discriminate. Under the GATT agreements, certainly the opportunity is there for the pro- cess to be open to U.S. entities. For us it is an opportunity and a challenge. I hope we meet it. DR. AMBLER: Our last speaker is Manuel Peralta. On January 1, 1989, Mr. Peralta was named president of the American National Standards Insti- tute, a very central body in that it coordinates the voluntary standards system in the United States. Through that system, standards developers, users, and other interested parties come to a consensus resulting in the status of an American national standard. ANSI is the U.S. representative to the ISO and the IEC. Previously, Mr. Peralta served as a senior executive in both government and industry, with the National Aeronautics and Space Administration and with Exxon. He has been a member of a number of boards of directors of several private organizations and has had extended assignments in the Neth- erlands, Spain, and England. MR. PERALTA: I am certainly pleased to have the opportunity to talk about ANSI, EC 92, and the activities that are going on because they have tremendous significance to the United States and to the whole global marketplace. What I am going to try to focus on are (1) successes to date in the United States achieving access to the EC standards process, through the

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 95 vehicles of ISO and IEC, and (2) the work that still needs to be done in connection with standards, particularly with testing and certification. Fi- nally, I will discuss the need for increased U.S. government and industry cooperation to strengthen our global competitiveness. Before I expand on those three points, what I would like to do is set a backdrop, covering global economic developments, the changing role of standardization technology, particularly its increasing significance in a glo- bal economy, and, finally, the global challenges that face the international standardization community. I think that provides a very important perspec- tive as we look at what is going on in connection with EC 92. For a number of decades the United States produced about 40 percent of the world's worth with 5 percent of the world's population. Our products were the most technologically advanced and were accepted as being of the highest quality. The enormous technological and economic advantages that the United States enjoyed have changed with the emergence of the global economy. In 1987 the U.S. share of the world GNP was 26 percent; it has been at that level since the 1970s. The EC is at 22 percent, Japan at 9 percent, and Russia at 14 percent. Significantly, the U.S. position in today's global economy is best characterized as the first among equals. Today, the imperatives that we face include expanding global markets, increasing worldwide competition, and rapid technological changes. Underscoring these imperatives is Europe's rapid movement to integrate its markets by 1992. The Community's efforts to remove its many internal barriers that impede the movement of goods and services is a positive development that will present both opportunities and challenges. In a global marketplace, standardization technology represents a key link between products and services and the customer in the marketplace. Stan- dards set the minimum acceptable criteria for goods and services and capital flow into the marketplace. Standards impact productivity, economies of scale, and pace of product development. Standards represent a technologi- cal asset that can facilitate or hinder marketplace competitiveness. At one time standards lagged significantly behind R&D, but this has changed, particularly in the area of high technology. One example is in the joint ISO and IEC technical committee regarding information technology, JTC-1. The experience with JTC-1 has become the model for the develop- ment of international standards. It is able to produce standards in about half the time of the typical ISO and IEC committees. Let me now turn to the challenges we face in the international standards community; there are four. The first is managing change effectively. The rapid pace of technological development, intense competition, and increased global markets, which I discussed earlier, are causing unparalleled change within the international standards community. Managing this change effec- tively will require creative leadership and a tolerance for complexity.

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96 EUROPE 1992 The second item is maintaining system balance. This requires managing expectations and perceptions at a strategic level, to ensure that transition into the future occurs in a way that does not result in any one political entity dominating the system to its own advantage. I will come back and say more about that with regard to ISO and IEC voting. The third item is achieving technological transfer. This means timely development of standards to meet the needs of the global marketplace. Overall, development and application of global standards need to be accelerated through the use of more modern management approaches. The fourth item is pursuing innovation. It is innovation that minimized the inertia to change and the inclination toward risk-avoiding status quo, and it is up to the leadership of the standards community to cultivate an environment of innovation and a collective sense of purpose. Dealing with these challenges successfully means a bottom line of contributing to a global market that is expanding; everyone is gaining from the prosperity that is associated with it. Let us now talk about the points I wanted to get into from a specific perspective, starting with access to the European standardization activities. There are really three approaches by which the United States has access to the activities in Europe. The first approach is that of using the vehicle of ISO and IECthe international forum. The second is by commenting directly on CEN and CENELEC work plans, drafts, and so on. The third is having ad hoc meetings where there is a mutual interest. Participation in ISO and IEC is a key to U.S. interest and influence in EC standards activities. The EC has charged the European private sector stan- dards bodies, CEN and CENELEC, with coordinating standards within the European Community itself. In turn, CEN and CENELEC are looking to ISO and IEC standards, except in areas where they cannot be made available on a timely basis. Thus, through ANSI's membership in ISO and IEC, the United States has a significant opportunity to influence standards development in the EC. The ANSI federation's membership in ISO and IEC provides the umbrella for the United States to play an effective role in international standards development. Through the efforts of the institute's members, the United States holds some of the most important ISO and IEC standards secretariats. Since the 1970s the U.S. leadership position in terms of administration of secretariats has increased significantly in both the ISO and the IEC. In addition, the United States holds secretariats in many of the most economi- cally significant sectors, as well as having some of the most productive secretariats. Certainly, with the growing significance of international standards it is increasingly important that the United States maintain a high level of interest and involvement in the activities of the ISO and the IEC. It is important

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 97 that ANSI communicate the needs to the private sector to become active participants in that process. Over the past year, improved access for U.S. industry to European standards activities has been achieved following U.S. and EC government contacts and through direct private sector meetings between CEN and CENELEC and a U.S. delegation under the auspices of ANSI. The meeting took place in July 1989 and was a major step in improving communication between the private sectors and in resolving some of the areas of mutual concern. In addition, liaison agreements between ISO and CEN and IEC and CENELEC were established in 1989, incorporating a proposal advanced through ANSI and forwarded to ISO and IEC for increased transparency. The agreements established served to strengthen the flow of information between the Euro- pean standardization organizations and ISO-IEC as well as the non-European member bodies such as ANSI. The agreements covered the mechanisms for monitoring and coordinating technical activities; for providing effective in- formation flow, including details on work plans, future projects, target dates, and work in progress; and, finally, drafts on standards for voting. The ANSI federation is actively working to inform U.S. groups with a material interest about the access agreements and is seeking to test the effectiveness of the implementation. As a long-time player in international standards activities, ANSI feels that the EC 92 efforts of the Community should not be viewed as fortress Europe, but neither should the will of the European Community be underestimated. We advise active involvement and monitoring in the ongoing standards and certification work; to quote some other people, it is not a spectator sport. During 1989 ANSI launched a special EC 92 information campaign to pro- vide U.S. interests with the background necessary to effectively compete in a changing global marketplace and to ensure greater access to timely infor- mation and improved coordination with the EC. A cornerstone of that effort was the establishment in August 1989 of the ANSI Brussels office, the center of the European Commission's activities. ANSI provides updates and special bulletins from the Brussels office on recent standardization activities of CEN and CENELEC. Special bulletins were issued in September 1989 and January 1990 to ANSI members, bulle- tins that are very important for anyone interested in EC 92 standardization issues; they are available through ANSI offices. For those of you who have not seen it, the January bulletin provides information on how to use the existing mechanisms, defines the existing mechanisms, and provides ex- amples of case studies that have occurred over the past several years in dealing with the standardization issues. I think it is a very informative document. As I already noted, ANSI is working to keep the U.S. voluntary stan- dards community better informed on access agreements that have been ne-

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98 EUROPE 1992 gotiated between ISO and CEN and between IEC and CENELEC. In addi- tion, to convey the latest EC information to the American standards community, the theme of this year's ANSI public conference is Standardization in the 1990s: Success in the Global Market; it will feature presentations by several European and American standardization leaders and trade experts. The focus of the meeting will be on challenges, seizing and creating opportuni- ties and overcoming obstacles facing U.S. industry in light of EC 92 de- velopments. Now that we have achieved a mechanism for access to European stan- dardization developments, we must inform and encourage U.S. industry to fully participate in the process and ensure its further development. To advance U.S. comments on European and regional standardization activities, our current focus is on communicating the CEN and CENELEC agreements to the private sector and monitoring the agreements to be sure that their intended purpose is being achieved. In addition, ANSI is also advancing a proposal within ISO and IEC to examine voting and funding relevancy, to ensure that ISO and IEC activities remain a viable forum for the expression of U.S. interests in light of global and EC 92 developments. Another area continuing to be pursued is testing and certification. The Institute's board has undertaken a special effort to develop mechanisms through which the United States can achieve mutual recognition and gain equal access to European certification and testing activities. To that end a special ANSI board committee on testing and certification was established last year, and at the private sector meeting in Brussels in July, CEN and CENELEC clarified Europe's global approach to certification and testing. While the specifics are still evolving, there was no indication that imported products would be structurally prevented from equal access to European markets. Moreover, we are very pleased that in the Council of Ministers' resolution dated January 21, 1989, the EC appears to modify a hard-line position taken earlier regarding testing and certification. We are hopeful of a Council decision that would have the effect of allowing non-European private sector organizations to negotiate the acceptance of their testing and certification by European notified bodies, as long as the European notified body maintained the legal responsibility for that certification. Also, to build on the progress achieved at the July 1989 meeting in Brussels, follow-up meetings between CEN and CENELEC and the U.S. delegation under the auspices of ANSI will be held on March 12. 1990, in Brussels and on March 27, 1990, in Washington, D.C. The United States has the opportunity to more effectively influence the outcome of Europe's decisions on standards, testing, and certification if the government and pri- vate sector work more closely together. In fact, a 1988 Harvard Business School study noted that one phenomenon that marked the global economy

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 99 of the 1980s was the extraordinary performance by countries whose na- tional strategies are characterized by business and government cooperation. Along these lines, ANSI's board has proposed to the U.S. Department of Commerce the establishment of a national partnership. The proposal calls for a private-public sector partnership that would foster better coordination and communication between government and the private sector in addressing the international challenges confronting the United States. As envisioned, the partnership would be based on maintaining existing roles and responsi- bilities and would be driven by the recognition that better cooperation is essential to the overall competitiveness of the U.S. efforts, for example, in dealing with the standardization issues related to EC 92. Certainly, the United States does not need a new structure, as suggested by a recently floated NIST proposal to establish the Standards Council of the United States of America. For 70 years the private sector administration of the voluntary standards system has effectively served U.S. needs and it continues to do so. To quote James Pearse, chairman of ANSI and group vice president for engineering at Leviton, "We are advocating more cooperation rather than more government." We are advocating a partnership rather than intervention. We seek a public-private sector partnership built on the strengths of the free enterprise system and not driven by government subsidies or market distortions. At this point, let me briefly summarize three points. First, the United States has achieved much over the past year, including better access to the European regional standardization activities. We must now test the access and follow up to ensure the intended objectives are being achieved. Second, there is more work that needs to be done with regard to voting and funding relevancy in ISO and IEC and with regard to equal access and mutual recognition in testing and certification. These represent areas of specific focus for the ANSI federation in 1990. Finally, the ANSI federation stands ready to work in a productive, cooperative partnership with the Commerce Department and other government bodies to enhance the global competitive position of the United States through standardization technology. In closing, I would like to parallel some other comments I have made in similar talks. We are in a period of profound change and opportunity. The ANSI federation has a major task and challenge in front of it. The U.S. voluntary system has demonstrated in the past its ability to successfully respond to the challenge, and it will continue to do so in the future. MR. BYRD: Gary Byrd, consulting engineer. I have spent most of my career in the field of transportation. In our field it has been the observation in the recent past that industry's investment in R&D has diminished rapidly over the years as standards and specifications have become more rigid. One alternative that has been looked at and holds promise, we believe, is the use of performance standards rather than specific identification of materials and

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100 EUROPE 1992 processes. I am simply interested in whether our panel members are look- ing at that as a future opportunity as well. DR. DUNSTAN: Yes, performance standards are certainly an ideal solu- tion for the sort of problem you have described. The normal description of a product in terms of prescriptive requirements does tie down design, espe- cially with regard to dimensions and similar parameters. But it is very difficult to write performance standards. The building industry, which I know well, does quite a good job on things like fire testing and so on, but it is always difficult to simulate real-life performance in the laboratory. It is very difficult to write that into a test schedule that can be followed cheaply and economically and in a reasonable time. I agree with you; ideally we should be aiming for performance criteria; practically, it is quite difficult to achieve them, and we have not enjoyed too much success so far. Maybe it is another topic for R&D in its support of standardization. DR. BHATIA: I would like to echo Dr. Dunstan's view. Underwriters' Laboratories, like many other organizations, writes standards that contain both performance criteria and what we call construction criteria. It is almost impossible to write strictly a performance document, because the real issue, whenever a standard is used, is a minimum and consistent level of performance, be it quality, safety, or whatever, and you cannot very easily achieve a comparable level of equivalency demonstration strictly on performance cri- teria. The tendency for us is to go more and more toward performance standards because they do allow better, more innovative design to be intro- duced. Certainly if you do not have the limitations placed on your design by construction or materials requirements, it would be easier to create and introduce into commerce new types of products, but the limitations have to be practically considered. You have to be fair in your assessment of different systems so that certain minimum criteria are met consistently. MR. DOYLE: Jack Doyle, IEEE. It has been stated several times here that the Europeans are going to "wherever possible" I think is the line that was used- settle on the international standard if there is one. Yet in one area that I am familiar with, the telecommunications area, we are already seeing some European Community standards being set up that differ from the CCITT standards, which have normally been the international standards. My question is, is there or should there not be some kind of an appeals process where the Europeans are choosing to or wish to select a standard different from the international community standard, so that the rest of the world has some opportunity to negotiate and try to get a world standard? DR. AMBLER: Are you speaking specifically about telecommunications standards? MR. DOYLE: No, I am using that merely as an example, where already it appears that they are adopting standards different from the world standard. But this would apply, I think, to almost any standard.

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EC STANDARDS SETTING, CERTIFICATION, AND TESTING PROCESSES 101 DR. DUNSTAN: I believe the questioner is right. If there is a departure from the international standard in the regional work, then at the very least there should be an explanation, and that should be given by the regional committee to the international committee. The channels that Manny Peralta talked about make provision for that. There are very close technical coop- eration links between CEN and ISO, CENELEC and IEC, and of course between ETSI and CCITT. So if they go in different directions for some reason, those channels are the right ways to exchange views and find out why. There is usually some reason, and the reason is not fortress Europe. There are many reasons why there may be some slight departure or some narrowing of options and so on. But always there should be, I believe, explanation and discussion, which I think you could class as an appeal. MR. PERALTA: The only thing I would add to Ivan's comment, is that ANSI is not involved in the CCITT aspect of international standards; that is a treaty organization. But certainly from the viewpoint of the nontreaty organization relationships, the mechanisms that are in place we see working, and in fact there are several examples where issues have been identified at the technical levels, in terms of the activities that either CEN and CENELEC was involved in or planning to be involved in. Meetings to arrange com- munications with U.S. counterparts were arranged, and I think a productive resolution resulted on those issues. What we are interested in is not only those issues but also whether there are any other examples of issues that need work. That is part of the system that is in place. As I tried to indicate, while we feel we have a reasonable access mechanism through ISO and IEC, there may be a need to modify the system if it is not working properly. We are looking for as much input and information as we can from the U.S. standards community and activities, so that we can follow up and, if appropriate, change the system and strengthen it. DR. AMBLER: Was there any implication in your question that, for example, with respect to telecommunications standards, U.S. interests did not get a chance to participate? MR. DOYLE: Well, sometimes in these areas, paranoia comes early and easily. I think the answer has to be, at least in my case, yes. DR. AMBLER: The open systems interconnect, for example. MR. DOYLE: Yes. In other words, it is sometimes very difficult to say that a standard is being adopted merely because it is the best for the EC and not at the same time saying that it discriminates against the rest of the world. These are simple things that can occur on both sides, so I am only saying that where we differ or where they differ from the world standard, you would hope that at least there would be a chance for everybody to have their say and agree.

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102 EUROPE 1992 MR. MEYER: Jim Meyer, Eastman Kodak. Several of the speakers have spoken of indirect pathways into influencing the European standards- setting process. Do U.S.-owned European subsidiaries have a more direct link into CEN and CENELEC? DR. DUNSTAN: That is a very important point. Certainly, U.S.-owned companies with subsidiaries or partners working in European countries have a very direct link into the various national committees where opinions are formed, and it is those opinions that come together at the European level. Multinational companies can be among the most active constituents in European standardization. Their views can influence the national delegations, which come together to agree on European standards. So they do have a rather direct route, and both Manny and I forgot to mention that in our presentations. Thank you for raising it.