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Standards, Conformity Assessment, and Trade
Into the 21st Century
International Standards, Conformity Assessment, and U.S. Trade Policy Project Committee
Board on Science, Technology, and Economic Policy
National Research Council
NATIONAL ACADEMY PRESS
Washington, D.C.
1995
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NATIONAL ACADEMY PRESS
2101 Constitution Avenue, N.W. Washington, D.C. 20418
NOTICE: The project resulting in this report was approved by the Governing Board of the National Research Council (NRC), whose members are drawn from the councils of the National Academy of Sciences (NAS), the National Academy of Engineering (NAE), and the Institute of Medicine (IOM). The members of the expert committee responsible for the report were chosen for their special competencies and with regard for appropriate balance.
The report has been reviewed by individuals other than the authors according to procedures approved by a Report Review Committee. This committee consists of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.
The Policy Division of the NRC consists of the Board on Science, Technology, and Economic Policy (STEP), the Committee on Science, Engineering, and Public Policy, and the Government-University-Industry Research Roundtable. The STEP Board reports as a unit of the Policy Division to the NRC Governing Board. This is the body by which the NAS, NAE, and IOM govern the work of the National Research Council.
This study was supported by the U.S. Department of Commerce's National Institute of Standards and Technology.
Library of Congress Cataloging-in-Publication Data
National Research Council (U.S.). International Standards, Conformity Assessment, and U.S. Trade Policy Project Committee.
Standards, conformity assessment, and trade: into the 21st century / International Standards, Conformity Assessment, and U.S. Trade Policy Project Committee, National Research Council.
p. cm.
Includes bibliographical references and index.
ISBN 0-309-05236-X
1. Quality control—Standards—United States. 2. Manufactures—Quality control—Standards—United States. I. Title
TS156.N366 1995
658.5'62'021873—dc20 95-1649
CIP
Copyright 1995 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America
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Members Of The International Standards, Conformity Assessment, And U.S. Trade Policy Project Committee
GARY C. HUFBAUER, Chairman, Reginald Jones Senior Fellow,
Institute for International Economics, Washington, D.C.
DENNIS CHAMOT, Associate Executive Director,
Commission on Engineering and Technical Systems, National Research Council, Washington, D.C.
LEONARD FRIER, President,
MET Laboratories, Inc., Baltimore, Maryland
STEVEN R. HIX, Chairman and CEO,
Sarif, Inc., Vancouver, Washington
IVOR N. KNIGHT, President,
Knight Communications Consultants, Clarksburg, Maryland
DAVID C. MOWERY, Associate Professor,
Walter A. Haas School of Business, University of California, Berkeley
MICHAEL M. O'MARA, Business Leader,
GE Plastics Cycolac Business, General Electric Company, Washington, West Virginia
GERALD H. RITTERBUSCH, Manager,
Product Safety and Environmental Control, Caterpillar, Inc., Peoria, Illinois
RICHARD J. SCHULTE, Senior Vice President,
Laboratories, American Gas Association, Cleveland, Ohio
SUSAN C. SCHWAB, Director,
Corporate Business Development, Motorola, Inc., Schaumburg, Illinois
MICHAEL B. SMITH, President,
SJS Advanced Strategies, Washington, D.C.
LAWRENCE L. WILLS, IBM Director of Standards,
IBM Corporation, Thornwood, New York
Professional Staff
JOHN S. WILSON, Project Director
JOHN M. GODFREY, Research Associate
PATRICK P. SEVCIK, Project Assistant
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Board On Science, Technology, And Economic Policy
A. MICHAEL SPENCE, Chairman, Dean,
Graduate School of Business, Stanford University, Standford, California
JOHN A. ARMSTRONG,
South Salem, New York
JAMES F. GIBBONS, Dean,
School of Engineering, Stanford University, Stanford, California
GEORGE N. HATSOPOULOS, Chairman and President,
Thermo Electron Corporation, Waltham, Massachusetts
KAREN N. HORN, Chairman and Chief Executive Officer,
Bank One Cleveland, Cleveland, Ohio
DALE W. JORGENSON, Frederic Eaton Abbe Professor of Economics,
Harvard University, Cambridge, Massachusetts
RALPH LANDAU,
Listowel Company, New York, New York
JAMES T. LYNN, Senior Advisor,
Lazard Frères and Co., Washington, D.C.
BURTON J. McMURTRY, General Partner,
Technology Venture Investors, Menlo Park, California
RUBEN METTLER, Chairman and Chief Executive Officer (retired),
TRW, Inc., Los Angeles, California
MARK B. MYERS, Senior Vice President,
Corporate Research and Technology, Xerox Corporation, Stamford, Connecticut
DONALD E. PETERSEN, Chairman (retired),
Ford Motor Company, Birmingham, Michigan
MICHAEL E. PORTER, Professor,
Harvard Business School, Boston, Massachusetts (until December 31, 1994)
JAMES POTERBA, Professor,
Department of Economics, Massachusetts Institute of Technology, Cambridge
GEORGE M. WHITESIDES, Professor,
Department of Chemistry, Harvard University, Cambridge, Massachusetts
Staff
STEPHEN A. MERRILL, Executive Director
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The National Academy of Sciences (NAS) is a private, self-perpetuating society of distinguished scholars in scientific and engineering research, dedicated to the furtherance of science and technology and their use for the general welfare. Under the authority of its congressional charter of 1863, the Academy has a working mandate that calls upon it to advise the federal government on scientific and technical matters. The Academy carries out this mandate primarily through the National Research Council, which it jointly administers with the National Academy of Engineering and the Institute of Medicine. Dr. Bruce M. Alberts is President of the NAS.
The National Academy of Engineering (NAE) was established in 1964, under the charter of the NAS, as a parallel organization of distinguished engineers, autonomous in its responsibilities for advising the federal government. Dr. Robert M. White is President of the NAE.
The Institute of Medicine (IOM) was chartered in 1970 by the National Academy of Sciences to enlist distinguished members of appropriate professions in the examination of policy matters pertaining to the health of the public. In this, the Institute acts under both the Academy's 1863 congressional charter responsibility to be an adviser to the federal government and its own initiative in identifying issues of medical care, research, and education. Dr. Kenneth I. Shine is President of the IOM.
The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Robert M. White are chairman and vice chairman, respectively, of the National Research Council.
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Preface
Product and process standards, as well as methods to ensure conformance to these standards, have important implications for economic progress and public welfare. They also are increasingly important to global commerce. We hope this book will serve as a reference document for public policy. It begins with a discussion of the relationship between standards, product testing, certification, and world trade. The volume then examines the role and responsibilities of U.S. government and industry in the system. Emerging trends in key international policies and programs are also addressed. The report concludes with a set of recommendations both to strengthen the U.S. domestic system and to enhance U.S. interests in overseas markets.
The National Research Council of the National Academies of Science and Engineering was asked by Congress in P.L. 102-245 to study these issues (Appendix B). The Council's Science, Technology, and Economic Policy Board provided the forum through which the study was initiated. A panel of experts provided oversight of the resulting study and the professional staff work which produced the final report.
The report addresses an extremely important set of goals for national policy. These involve removing ineffective and duplicative rules and regulations that govern testing, certification, and laboratory accreditation. Urgent reform is needed in national conformity assessment policy. This will come about, in part, through changes in the mandate of the National Institute of Standards and Technology. This report also discusses ways in which the United States can promote open trade by removing standards-related barriers to trade and mechanisms to better support U.S. exports in world markets. The U.S. should aggressively
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eliminate barriers to global trade embedded in discriminatory foreign policies and practices. At the same time, we should lead the international community in creating a global network of mutual recognition agreements by governments with differing national conformity assessment systems.
Numerous individuals provided advice and assistance throughout the project. Most importantly, John Godfrey and Patrick Sevcik deserve great credit for their outstanding work. The committee served with extraordinary dedication to the success of this effort. Many individuals in government provided assistance to the project, especially those at the National Institute of Standards and Technology and the Office of the U.S. Trade Representative. Numerous experts in industry and universities also provided briefings, important information, and other assistance in our work. This is particularly true of those affiliated with the American National Standards Institute and other U.S. standards bodies.
Gary Clyde Hufbauer
Chairman
John Sullivan Wilson
Project Director
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Contents
EXECUTIVE SUMMARY
1
Conformity Assessment
2
Standards Development
3
International Trade
4
Addressing Future Challenges and Opportunities
6
1
INTRODUCTION
9
Functions of Standards
11
Commercial Communication
11
Technology Diffusion
11
Productive Efficiency
14
Enhanced Competition
14
Compatibility
15
Process Management
15
Public Welfare
16
Conformity Assessment
17
Standards, Conformity Assessment, and Public Policy
18
Assessing the U.S. System
18
Public Welfare
20
U.S. International Trade Policy
20
2
STANDARDS DEVELOPMENT
23
Scope of the U.S. System
26
Private-Sector Standards
29
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Economic Rationale for Consensus Standardization
30
Voluntary Consensus Standardization Processes
33
Standards-Developing Organizations
36
Professional Societies
36
Industry Associations
37
Membership Organizations
38
Consortia
39
American National Standards Institute
39
International Standards Development
46
Government Role in Standardization
48
National Institute of Standards and Technology
52
Federal Use of Voluntary Consensus Standards
54
Public-Private Cooperation
57
Summary and Conclusions
60
3
CONFORMITY ASSESSMENT
65
Conformity Assessment System Framework
68
Testing and Certification
71
Product Testing
71
Product Certification
72
Private and Public Certification Programs in the United States
73
Quality System Registration
77
Accreditation and Recognition
80
Accreditation Services
80
Costs of Redundancy in U.S. Accreditation
87
Government Recognition of Accreditation Services
97
Summary and Conclusions
99
4
INTERNATIONAL TRADE
103
Standards, Trade, and U.S. Economic Progress
104
Standards and the Economic Benefits of Trade Expansion
104
Cost of Protection: Non-Tariff Barriers to Trade
107
Barriers to Trade in Key U.S. Export Markets
108
Multilateral Trading System: The Uruguay Round
112
Membership and Expansion of Scope
113
Coverage of Conformity Assessment
118
Extension of Coverage to Nongovernmental Organizations
119
Dispute Settlement
120
U.S. Trade Policy and Section 301
121
Overview of U.S. Trade Policy Formation and Implementation
121
Private-Sector Advisory Mechanisms
124
Removing Standards-Related Trade Barriers: Section 301
124
Mutual Recognition Agreements
126
Background: Product Approval in the European Union
126
U.S.-European Union MRA Negotiations
130
Mutual Recognition Agreements: APEC
134
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U.S. Export Promotion
140
U.S. Export Promotion Policy
140
Case Example: Emerging Standards and Conformity Assessment Systems in Indonesia
141
A Model for Standards Assistance Activities
144
Summary and Conclusions
147
5
RECOMMENDATIONS TO ADDRESS FUTURE CHALLENGES AND OPPORTUNITIES
153
Conformity Assessment
154
Standards Development
157
International Trade
160
Meeting Future Challenges
163
APPENDIXES
A New Developments in International Standards and Global Trade: A Conference Summary
John S. Wilson, John M. Godfrey, Holly Grell-Lawe
169
B Legislative Request for the Study: Public Law 102-245
197
C Biographical Information on Committee and Staff
199
D Glossary and Acronyms
205
E Selected Bibliography
213
INDEX
229
