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  •     WTO: Non-Tariff Measures

    Technical Barriers to Trade

    Part 3: Difference between standards and technical regulations

    A standard is a document approved through consensus by a recognized (standardization) body, that provides, for repeated and common use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, and packaging, marking or labelling requirements as they apply to a product, process or production method.

    A standard describes features of a product, process, service, interface, or material. Standards are embodied in several forms, such as definition of terms; specification of design and construction; detailing of procedures; or performance criteria against which a product, process, etc., can be measured. Product and process standards can have several specific functions. These functions include:

    • Fostering commercial communication

    • Diffusing or transferring technology

    • Raising productive efficiency

    • Ensuring physical and functional compatibility (product quality)

    • Improving process management

    • Enhancing public welfare

    • Interchangeability and interoperability

    • Safety, health and environmental protection

    • Variety control

    • Usability (fitness for purpose)

    Standardization provides a basis for technical/trade agreements and technical regulations.

    A technical regulation is a Government document that lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, and packaging, marking or labelling requirements as they apply to a product, process or production method. No consensus is necessary for establishment of the regulation.

    The difference between a standard and a technical regulation lies in compliance. While conformity with standards is voluntary, technical regulations are by nature mandatory.

    They have different implications for international trade. If an imported product does not fulfil the requirements of a technical regulation, it will not be allowed to be put on sale. In case of standards, non-complying imported products will be allowed on the market, but then their market share may be affected if consumers' prefer products that meet local standards such as quality or colour standards for textiles and clothing.

    The TBT Agreement, inter alia, has provided that technical regulations should not create unnecessary obstacles to international trade, therefore they should not be more trade-restrictive than necessary to fulfil a legitimate objective, taking into account the risks that non-fulfilment would create, as evidenced by available scientific and technical information, processing technology or intended end uses of the products.

    Imported products should be given, in respect of technical regulations, no less favourable treatment than that accorded to like products of national origin and to like products from any other country.

    International standards should be used as a basis for preparing technical regulations except when they are not appropriate to fulfil legitimate interests, for instance, because of fundamental climatic or geographic factors or fundamental technological problems.

    For a government, avoiding unnecessary obstacles to trade means that when it is preparing a technical regulation to achieve a certain policy objective - whether protection of human health, safety, the environment, etc. - the regulation shall not be more trade-restrictive than necessary to fulfil the legitimate objective.

    Each WTO Member is required to notify all its proposed technical regulations including labelling requirements which are either not based on the relevant international standards (or where no international standards/guidelines exist) and have significant trade effects (both positive and negative). Such notifications, concerning the preparation, adoption or application of technical regulations, should be submitted through the WTO Secretariat. Enough time must be allowed for written comments/discussions and these comments should be taken into account and the results of the discussions communicated to those making comments. Governments are obliged to provide justification for the proposed technical regulations, if so requested by other members.
    According to the TBT Agreement, specifying, whenever appropriate, product regulations in terms of performance rather than design or descriptive characteristics will also help in avoiding unnecessary obstacles to international trade. For example, a technical regulation on fire-resistant doors should require that the door passes successfully all the necessary tests on fire resistance. Thus it could specify that "the door must be fire resistant with a 30-minute burn through time"; it should not specify how the product must be made, e.g. that "the door must be made of steel, one inch thick".

    The following case of labelling requirements of natural latex condoms is an example where a technical regulation framed by Colombia would have become a technical barrier if Malaysia would not have reacted to it in a timely manner.

    The Ministry of Social Welfare of Colombia in 2003 had proposed a new requirement for the labelling of natural latex condoms. The TBT notification stated that 'each condom in the individual container shall bear at least the following information: manufacturer's trade name, sanitary register number, expiry date, batch number, the number of condoms contained, instructions for use of the condom, the statement that the condom is made of natural rubber latex that can cause irritation, instructions for the storage viz. "Store the condom in a cool dry place away from direct sunlight".

    A major manufacturer of condoms in Malaysia contested that, in the event of the enforcement of the Colombian decree, their cost would be adversely affected, since the redesign of the individual container of the condom would be necessary because the existing packet is too small to accommodate the proposed labelling. Furthermore, sales could be badly affected as the warning against allergies would be given undue prominence and at the same time create panic among the consumers.

    SIRIM contested that the proposed technical regulation exceeds ISO 4074:2000 as this international standard permits marking of condoms on two places viz. individual condom pack carrying identity of manufacturer, lot number, expiry date while consumer pack shall bear the general information. In addition, the imposition of technical regulations on labelling is unnecessary, since the labelling requirement can be interpreted as a standard as stated in Annex 1 of the TBT Agreement, and therefore compliance is not mandatory.

    Malaysia's objection against Colombia's draft decree was deliberated by the Committee on Technical Barriers to Trade (CTBT) at the WTO in Geneva which recorded that, according to procedure, the country issuing the decree (Colombia) should respond to Malaysia's comments. After this SIRIM sent two reminders on their comments but received no response from the Colombian government. It was therefore assumed that, as a result of the action taken by Malaysia to assert its rights under the TBT Agreement, Colombia had withdrawn its decree. Both manufacturer and SIRIM believed that the matter had been resolved, since the Malaysian company continues manufacturing using its original package and continues to control the market share in Colombia.

    Technical regulations adopted in pursuance of legitimate interests and in accordance with relevant international standards are presumed not to create unnecessary obstacles to international trade.

    Avoidance of trade obstacles means also that, if the circumstances that led a country to adopt technical regulations no longer exist or have changed, or the policy objective pursued can be achieved by an alternative less trade-restrictive measure, they should not be maintained.

    Following is an example where the imported products were treated less favourably than domestically-produced products:

    • The USA imposed stricter rules on the chemical characteristics of imported fuel than those imposed on domestically refined fuel. During 1995, Venezuela (the exporting country), complained about this, and the WTO through its dispute settlement procedures, decided the matter in favour of Venezuela. The USA changed its regulations in 1997.

    Following is another example where a technical regulation would have become a technical barrier if a WTO Member would not have reacted to it in a timely manner:

    • The Government of Canada complained to the Government of the Republic of Korea regarding certain laws and regulations of the Republic of Korea concerning bottled water. The laws quoted were the Drinking Water Management Law and the Public Notice on Standards, Specifications and Labeling Criteria of Bottled Water.

    Two provisions were of concern to Canada, Article 8 established that the shelf-life of bottled water was 6 months from its production date. Article 3 provided that physical water treatments, such as precipitation, filtration, aeration and ultraviolet disinfection were permitted, but any use of chemical treatment was prohibited. Officials of the Republic of Korea informed Canadian officials that disinfection by ozonation was a prohibited chemical treatment.

    The Government of Canada was of the view that these laws and regulations were inconsistent with the obligations under WTO Agreements. Ozonation is a proven and commonly accepted treatment process for water. It is unlikely that it can be proven that a shelf-life of six months is unreasonable.

    Canada's complaints were accepted as valid by Korea which undertook to amend the relevant laws and regulations to allow importation, sale and distribution of ozone-treated bottled water. It also agreed to ensure the transparency of its procedures for an extension of shelf life.

    Related articles
    - Part 1: What are technical barriers to trade?

    - Part 2: Basic principles of the Agreement on Technical Barriers to Trade

    - Part 2: Basic principles of the Agreement on Technical Barriers to Trade (Contd)