TPP & Technical Barriers to Trade
By: Steve Craven
My previous post dealt with food safety and agricultural standards. This one picks up that theme, but extends it into standards for all other kinds of products. (There can be some overlap for things like processed food products.)
The objective for U.S. negotiators of this part of the TPP was to bring other countries closer to the sort of transparent, science-based standards systems that prevail in the United States. That means a clear path for companies to navigate through standards setting, testing and product certification (often called “conformity assessment”). Product standards can be divided into two broad classes: design standards and performance standards. Many countries favor design standards as a guaranteed way to protect their consumers. These are standards that lay out in exquisite detail how a product must be built in order to offer the desired level of protection. An example might be that the cockpit sides of a sailboat must be of a certain height and shape to prevent waves of a certain height from entering the boat. Standards in the United States typically go the performance route; the standard might say that cockpits must be built so that waves of a certain height won’t fill the boat, but leaves the details of construction open. One sets out physical limits for the product; the other lays out how the product should perform. Clearly, the performance standard allows for more design innovation, so this is what our negotiators went for.
But they couldn’t do it directly, because all countries have a mix of performance and design standards. What the TPP text does is to extend earlier international agreements on standards to allow foreign participation in standards setting so that our exporters have an opportunity to argue for performance standards. More, TPP would set up a standards testing and certification system parallel to the prevailing U.S. system that will lead to getting your products tested and certified only once. If you get the through the process in one of the TPP countries, the other countries will accept your products for their own markets. That means that if your product is certified by Canada, you won’t have to do it all over again, say, in Chile.
That said, there is nothing in the TPP that restricts the rights of governments to regulate products and manufacturing processes to protect public health, environmental quality and other public-policy goals. That is a principle enshrined in the 1947 General Agreement on Tariffs & Trade and virtually all trade agreements since then. There is room to challenge use of this exception if you think a government is merely using standards as a tool to disguise protectionism. Think of the old Japanese argument that European snow skis should not be allowed into Japan because Japanese snow was different from the snows of the Alps.
The product standards world is highly complex, so the TPP negotiators quickly realized that separate agreements (actually, annexes to the TPP itself) would be needed for several specific product areas: information and communications technology, cosmetics,medical devices, pharmaceuticals, wines and spirits, formulas for certainfood products, and organics. If you are buying or selling such products, it wouldn’t be a bad idea to explore the annexes.
In sum, the product standards portions of the TPP (Chapter 8) will make it easier for Hawaii’s exporters to sell their products in other TPP markets. Recognition of other countries’ certification will make it far quicker and far less expensive to do business.
Steve Craven advises companies on international business strategies and how to overcome problems encountered in foreign markets. He is a former consultant, American diplomat and a U.S. trade negotiator. He served as a Career Diplomat and Senior Foreign Service Officer, member of the U.S. Commercial Service, U.S. Department of Commerce. Mr. Craven also previously served as Chair of the Hawaii Pacific Export Council.