RESTRICTEDWORLD TRADE
ORGANIZATIONG/IT/SPEC/Q2/3
13 March 2001
(01-1211)
Committee of Participants on the Expansion
of Trade in Information Technology ProductsOriginal:  English
SUBMISSION FOR THE NON-TARIFF MEASURES WORK PROGRAMME
Communication from Australia
The following communication, dated 8 March 2001, has been received from the Permanent
Mission of Australia.
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This submission is provided in response to the decision of the Committee of Participants on
the Expansion of Trade in Information Technology Products (the ITA Committee) of 13 November
2000 to identify non-tariff measures (NTMs) which are impediments to trade in ITA products, as the
first phase of a work program on NTMs.
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Access to ITA products is fundamental to economic progress and development.  Hence all
countries, including developing countries, stand to benefit from greater access to ITA products
resulting from trade liberalisation.
NTMs cause delays in trade and add to its costs.  There is a direct effect on manufacturers and
exporters, impeding trade, and the delays and costs also affect consumers – government, business,
non-government organisations and individuals – hindering their access to the latest technology and
thus acting as a brake on economic development.  They aggravate the digital divide at theinternational and intranational levels, making it hard er for countries to benefit from the efficiencies
flowing from the application of information and co mmunications technology, including in electronic
commerce and other aspects of the information economy.
- Various "national experience papers" submitted to the ITA committee have established a link
between regulatory reform, trade liberalisation and benefits for users and industry.  (See
Reform of Technical Regulation in the Telecommunications Sector:  Australia's Experience,
1998.)
- In Australia's case, a study by the National Office for the Information Economy has found
that the widespread adoption of electronic commerce could result in a 2.7% increase in the
level of national output with in the next decade.  (See E-commerce beyond 2000, 2000.)
- According to a paper published under WTO auspices, there is a relationship between a
country's economic success and its access to IT equipment at low cost, including by means of
trade liberalised through the ITA.  (See Pradip Bhatnagar:  "Telecom Reform in Developing
Countries and the Outlook for E-commerce" in Journal of World Trade, 1999.)G/IT/SPEC/Q2/3
Page 2
- A study by the International Trade Centre (ITC), a joint operation of the WTO and UNCTAD,
demonstrates widespread concern – in developed and developing countries – about the impact
of standards-related NTMs and the importance which industry and officials attach to
measures to address them.  (See Trade in Information Technology Products and the WTO
Agreements:  Current Situation and Views of Exporters in Developing Countries, 1999.)
This submission has a focus on standards-related NTMs.  These have the greatest impact in
terms of cost and delay in products reaching the market.  These costs and delays make it harder for the
manufacturer to obtain a reasonable return on investment and so they act as a disincentive to the
development of new technology.
The NTMs raised in this submission are:
- issues in the development, content and application of some standards with trade-related
implications (applying at both the international and national levels and including the issue of
delay in national adoption of international standards in some countries)
- issues in regulatory procedures governing ITA products and- lack of acceptance of conformity assessment test reports and certification between
countries/regulators.
These issues are related, and the comments for any one of these NTMs may be relevant to the
others.
This submission does not suggest that the NTMs raised here are necessarily deliberate:
NTMs frequently arise inadvertently.  It is also recognised that a great deal of progress is being made
by national, regional and global standards and conformance bodies at their own initiative and that
there is scope for the WTO to support this activity .  Clearly any such action will respect the guiding
principle of national sovereignty, which is also the basis of all comments in this submission.
It is important to emphasise that standards and conformance measures and other forms of
regulation are not trade barriers per se   Nor does Australia advocate deregulation as a panacea.
Regulations are required to set minimum market entry requirements, in the interests of safety,
electromagnetic compatibility (EMC) controls and interoperability.  Regulatory measures such as
post-market audit and surveillance are critical to the effective application of some standards-related
business practices such as use of the supplier's declaration of conformity.  Moreover, many industry
standards are used in the marketplace as part of  commercial and technical negotiation between buyer
and seller, without creating NTMs (e.g. many standards for software systems).
The issues to be confronted in relation to the subjects of this submission are, broadly
speaking:
- the need for greater support for those organisations that provide the infrastructure that
underpins global trade
- the importance of continual improvement in delivery of standards and conformance
infrastructure services
- the recognition of the limitations of regulatory action in a time of rapid development of global
technologies.G/IT/SPEC/Q2/3
Page 3
This submission has a particular focus on issues relating to regulatory requirements  applied
by government with the effect of controlling access to markets.  However, it also considers voluntary
standards  developed by stakeholders in national and international fora.  The former are often
considered NTMs in instances where they have an unreasonable impact on market access.  As noted
above, progress is already being made to address this 'classic' variety of NTM.  The emerging trendtowards voluntary standards may need to be supported, especially where standards development
adversely affects trade by lagging behind technology development.
A range of solutions offered by a range of government and non-government organisations can
contribute to discussions on reducing NTMs and supporting enhanced delivery of standardisation and
conformity assessment services.
1. NTM:  Issues in Standards Development
1. The NTM
Issues in the development, content and application of some standards have trade-related
implications:  this applies at both the international and national levels and includes the issue of delay
in national adoption of international standards in some countries.
2. ITA products affected
This NTM affects a wide range of both information and communications products (including
for voice and data communication and information processing), especially as used by business and
other end consumers.
3. How it impedes trade in ITA products and details of the trade-distorting impact of the NTM
(e.g. undue delays at the border, difficulties in getting the necessary licences)
Divergent national standards can be used to protect local industry.  This can occur in a
number of ways.
- In some cases countries make choices against alignment with international standards, e.g. in
relation to IEC60950 (electrical safety of ICT equipment) and EMC.
- Delays in the national adoption of international standards can act to impede trade.
- In some countries there are standards development organisations (SDOs) which develop
standards in order to raise revenue from the associated testing and/or certification.
- In recent years management systems standards have been developed at international level.  In
some cases, national standardisation bodies (NSBs) and SDOs focus on seeking revenue
through adoption of and certification to such standards.
These measures expose suppliers to a variety of technical specifications and to unnecessary
duplication of testing and compliance requirements.  When some countries are fast adopters of
standards and revisions of standards and others are slow adopters, suppliers must maintain the
capacity to produce product to and demonstrate compliance with both sets of requirements, and
additional costs are inevitably passed on to consumers.G/IT/SPEC/Q2/3
Page 4
4. Additional information
(a) The long-standing model for international standards development depends to a large extent
on:
- revenue from standards sales for operation (this also applies at the national level)
- national representation in international standards development and- a development timeframe that is too long in relation to the lifecycle of some technologies.
It is also characterised by:
- a mode of operation which creates particular difficulties for certain participants
- delay in the national adoption of international standards in some countries.
In recent times this model has come under pressure to deliver standards with greater speed
and at lower cost to participants.  There have also been demands for a greater range of deliverables.
An even greater challenge has been to recognise in pricing and distribution policies that standards aredeveloped by a substantial resource contribution by industry participants.
The development of standards on the basis of national representation has certain limitations,
particularly in sectors where global products are dominant.  Representation by parties who are
technical experts in their own right has been ex plored but there is a tension between standards
development that is technically representative and one that is inclusive in the sense of being fullyinternational.
In recent times standards development operations have come under further pressure as various
fora and consortia have emerged to produce and disseminate standards and technical specifications at
high speed.  Major issues in this context are the extent to which these new bodies are representative of
all concerned parties and are responsive to changes in their working environment.
New approaches to standardisation such as the industry technology agreements of the
International Electrotechnical Commission (IEC), the International Organisation for Standardisation
(ISO) and the ISO-IEC Joint Technical committee on IT (JTCI) endeavour to provide a basis for rapid
development of technical specifications that do not compromise the inherent safeguards of the
international standards development system,
- thus providing alternative routes for participation in standards setting.
(b) Experience in many countries is that NSBs may not be generating sufficient funds to react
quickly enough to the needs of the IT sector.  NSBs  derive income from a variety of sources including
government grants, stakeholder contributions and sales of standards and related products and services.
Generally the principle applied is that the user/beneficiary of the standardisation process pays in some
form.  In some cases NSBs also derive income from certification and other conformity assessment
activities that are provided in a commercial ma rketplace;  in such cases there is usually an
organisational separation in place that ensures that standards are prepared in response to stakeholder
needs and not for the purpose of enhancing any a ssociated conformity assessment activities of the
NSBs.
While this model generally functions well, problems can arise in some cases, as noted above
in (3).G/IT/SPEC/Q2/3
Page 5
(c) Broad participation by countries in the international standards-setting process in conducive to
general acceptance of the resultant standards.  In some cases, however, countries are not members of
relevant international bodies or do not fully participate in their meetings.
In many cases it is difficult to achieve national representation at standards development
meetings.  This difficulty is particularly great for countries remote from the location of most meetings,i.e. Europe and North America.  Further hindrances are a small population and a small local ICT
industry as bases to fund representation.  The costs are great in terms of travel to and from and
expenses incurred at meetings, plus – for company representatives – the lost productivity or revenue
over the time in question.
Inability to participate fully in the internat ional standards-setting process, including by
attending standards development meetings, has adverse implications:
- it reduces the flow of information to other parties in the jurisdiction concerned, including
regulators and industry – not only IT manufacturing industry but also other sectors, such as a
services industry which might apply the technology under consideration
- the country concerned is less likely to be comfortable with the resultant international standard
- national adoption is likely to be slower
- there is a greater likelihood of national deviations.
One very important way to increase national understanding and acceptance is for a country to
host international standards development committee meetings of relevance to its economy.  However,
this is sometimes hampered by a shortage of resources.  Much of the time, industry is not in a position
to share the costs of such meetings.  Industry already contributes significantly in terms of voluntary
expertise (expert representatives' time, travel costs and lost productivity/revenue while attendingnational and international standards meetings).
(d) In some instances, difficulty is encountered in ensuring that the national representation
reflects a consensus of all stakeholders.  Shortcomings in this respect can cause delay in the
development of standards or can favour one technology over others.
2. NTM:  Regulatory Issues
1. The NTM
Issues in regulatory procedures governing ITA products
2. ITA products affected
This affects a wide range of both information and communications products (including for
voice and data communication and information processing), especially as used by business and end
consumers.
3. How it impedes trade in ITA products and details of the trade-distorting impact of the NTM
(e.g. undue delays at the border, difficulties in getting the necessary licences)
Some regulatory procedures can act as market access barriers by causing unreasonable delay
and additional costs to trade.G/IT/SPEC/Q2/3
Page 6
4. Additional information
Regulatory procedures, particularly type approval régimes, may mean that administrative
processes demand excessive time and cost, which is particularly important in the case of many ITA
products, given their increasingly short life cycles:   his can exclude suppliers from some markets.
Concerns include the following:
- In some cases there is a lack of transparency in government regulation and (where provided)
in government explanation of such regulations.
- There are issues arising from the multiplicity of bodies with responsibility for administering
regulations in any one country or jurisdiction.  Particular problems may arise in states with
federal constitutions, in which the legislation or practices of constituent states or provinces
may be at variance with those of the federal government or of each other.  However, problems
are not confined to federal states, as local government and bodies such as school boards mayhave responsibilities (e.g. for fire safety) which have implications for standards and
conformance.
- In some cases there is deficient coordination among regulatory bodies within any one country.
A number of countries have introduced alternative regulatory mechanisms to type approval
through which they have both attained legitimate regulatory objectives and permitted faster marketaccess, while requiring the supplier to accept full responsibility for compliance with legitimate
regulatory objectives through the use of a supplier's declaration of conformity.
As part of regulatory reform, some governments have reduced the scope of some regulations
so that their sole aim is to cover essential protections from harm to endusers.  In the case of global
technologies, disparity in the scope of regulation among countries suggests the need for examinationof the basis for regulating.
- Thus there is a general issue of the extent to which government should be involved in setting
and ensuring conformance with standards, takes into account the interests of all parties –
manufacturers, suppliers, consumers and government itself – and with a view to maximum
efficiency in economy-wide terms.
- There is a broad trend towards regulatory compliance regimes based on risk assessment
principles:  this can lead countries to require different levels of conformity assessment.  There
is no generally accepted set of principles to inform countries in this regard.
Further information is contained in the Austra lian paper delivered at the WTO Information
Technology Symposium held in Geneva under the auspices of the ITA on 16 July 1999
(http://www.wto.org/english/tratop_e/inftec_e/gall.doc).
3. NTM:  Lack of Acceptance of Conformity Assessment Test Reports and Certification
1. The NTM
Lack of acceptance of conformity assessment test reports and certification between
countries/regulators
2. ITA products affectedG/IT/SPEC/Q2/3
Page 7
This affects a wide range of both information and communications products (including for
voice and data communication and information processi ng), especially as used by business and other
end consumers.
3. How it impedes trade in ITA products and deta ils of the trade-distorting impact of the NTM
(e.g. undue delays at the border, difficulties in getting the necessary licences)
The lack of acceptance of conformity assessment test reports and certification among
countries/regulators causes delays in trade and adds to its costs.
4. Additional information
The lack of acceptance of conformity assessment test reports and certification can take a
number of forms including:
- disparity in the level of testing required for imported and locally produced goods
- unreasonable demands for testing in the importing country as a means of effecting transfer of
technology
- unreasonable demands for intellectual property – some testing houses insist upon
receiving full technical specifications so obtained, at the risk that they may not be
adequately protected, resulting in illicit copying of the product in question;  some
jurisdictions my also publish the specifications, with the same possible result
- excessive costs of destructive testing (borne by the manufacturer or supplier)
- asymmetrical functioning of some mutual recognition agreements/arrangements (MRAs):
some countries do not implement undertakings to accredit testing houses or certification
bodies located in jurisdictions with which they have entered into MRAs
- lack of recognition of industry MRAs by governments
It was noted in the previous section that there are issues arising from the multiplicity of
bodies with responsibility for administering regulations in any one country or jurisdiction.  This
problem, which is particularly relevant to states having provincial governments with wide
responsibilities, is also relevant under this heading.
A number of measures are being used to increase acceptance of conformity assessment test
reports and certification, including:
- government-to-government mutual recognition agreements/arrangements, such as the MRA
for Telecommunications Equipment of th e APEC Telecommunications Working Group
- international conformity assessment schemes such as the Certification Body (CB) scheme
under the IEC's System for Conformity Testing and Certification of Electrical Equipment
(IECEE) and
- mutual recognition agreements between conformity assessment bodies/accreditation
organisations including the IAF and ILAC.G/IT/SPEC/Q2/3
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Generally these arrangements depend upon use of international guidance documents and are
predicated on common standards.  It is less commonly recognised that acceptance of conformity
assessment test reports and certification can be hampered by:
- lack of clarity in regulation
- lack of information on market conditions- deficiencies in coordination between regulatory agencies and test houses, including lack of
transparency in designation of conformity assessment bodies, lack of clarity in interpretation
of regulations and a lack of explanation by regulators of their requirements, including in terms
of administrative culture and expectations.G/IT/SPEC/Q2/3
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Standards and Conformance Bodies and Arrangements
Select List
APEC MRA APEC Telecommunications Mutual Recognition Arrangement
http://www.apii.or.kr/apecdata/telwg/mraTG/mra-APEC.html
APLAC Asia-Pacific Laboratory Accreditation Cooperation
http://www.ianz.govt.nz/APLAC
CB Scheme Certification Body scheme under the IEC's System for Conformity Testing and
Certification of Electrical Equipment (IECEE)
http://www.cbscheme.org
IAF International Accreditation Forum
http://iaf.nu/
IEC International Electrotechnical Commission
http://www.iec.ch
IECEx Scheme IEC Scheme for Certification to Standards for Explosive Atmospheres
http://www/iecex.com
IEC ITA IEC industry technology agreement
http://www.iec.ch/ita-e.htm
ILAC International Laboratory Accreditation Cooperation
http://www.ilac.org
ISO International Organisation for Standardisation
http://www.iso.ch/
ITU International Telecommunication Union
http://www.itu.int/
JTC1 IEC-ISO Joint Technical Committee 1 (Information Technology)
http://www.jtc1.org
PASC Pacific Area Standards Congress
http://www.pascnet.org
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