RESTRICTEDWORLD TRADE
ORGANIZATIONG/IT/SPEC/Q2/6
4 April 2001
(01-1704)
Committee of Participants on the Expansion
of Trade in Information Technology ProductsOriginal:  English
SUBMISSION FOR THE NON-TARIFF MEASURES WORK PROGRAMME
Communication from Hong Kong, China
The following communication, dated 2 April 2001, has been received from the Hong Kong
Economic & Trade Office.
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In accordance with the NTMs Work Programme in G/IT/19 dated 13 November 2000 and the
agreed guidelines for submissions of NTMs Inventory, Hong Kong, China submits this return for the
NTMs Inventory.
1. The NTM
The major type of NTM faced by Hong Kong’s exporters and manufacturers of information
technology products is related to standards and conformance, under which two concerns arise,
namely, cumbersome procedures for conformity assessment and excessive technical regulation or
standards of the exporting markets.
(a) Cumbersome Conformity Assessment Procedures
Some of our exporting markets require exporters to complete various conformity assessment
procedures before they can put up their products for sale in those markets.  For example, an economymay require a Certificate of Conformity for every shipment of regulated products imported.  The
process of application for the Certificates of Conformity is unduly long and costly.  The applicant has
to obtain an application form from the representative office of the economy in Hong Kong.  The
completed form has to be notarised by a notary public, certified by a local chamber of commerce and
then sent to the relevant authority in the econom y concerned well in advance (at least two months)
before shipment for verification and approval.  Upon approval, the certificate will be returned to the
applicant, who must attach a copy with each shipment of the products concerned to that economy.
(b) Excessive Technical Regulation or Standards
Most economies adopt technical regulations for the purpose of safeguarding health and safety,
but the extent of protection is often an issue of contention.  In some cases, the technical requirementsimposed can be excessive and well above the actual protection needs, and the adoption of such
requirements will increase the burden of manufacturers and exporters or even become a major barrier
for access to a particular market.G/IT/SPEC/Q2/6
Page 2
2. IT products affected
The major groups of products affected by cumbersome conformity assessment procedures
include personal computers (including both desktop and portable computers), telephone sets and
modems.  On the other hand, excessive technical regulation or standards is mainly found in
telecommunications equipment and products, such as radio transmitters and receivers.
3. How the NTM impedes trade in IT products  and the specific details of the trade
distorting impact of the NTM
The NTMs mentioned above could seriously impede trade in the products concerned and the
trade distorting impact is detailed in the ensuing paragraphs.
(a) Cumbersome Conformity Assessment Procedures
(i) Additional Trading Cost
The cumbersome procedures for obtaining an approved Certificate of Conformity add much
trading cost to manufacturers and exporters.  In addition, substantial fees are charged by the
representative office of the economy concerned in Hong Kong for sending each piece of free sample
to a potential buyer in that market in the example quoted above.
(ii) Undue Delays
In the case mentioned above, it will take at least two months to complete the various
procedures of applying Certificates of Conformity before shipment.  If there are other complications,
the process may take much longer.
(iii) Uncertainty for Trade
The exporter has no knowledge of whether and exactly when he can successfully get the
approved certificate of conformity during the lengthy period of application.  This uncertaintyincreases business risks to the exporters and discourages them from exporting to that particular
market.
(iv) Impeding the Development of E-commerce
The rapid realisation of e-commerce cannot be attained unless there is wide acceptance of
suppliers’ declaration of conformity.
(b) Excessive Technical Regulation or Standards
(i) Additional Trading Cost
Meeting the requirements of a more stringent technical standard may necessitate changes in
product designs that will lead to significant increase in production costs.  Manufacturers may have no
choice but to produce different versions of their products for different markets and hence increase the
costs of their products.  This will also reduce the flexibility in planning their production globally.
(ii) Technological Advantage to Domestic Goods
Where an economy imposes technical regulation or standards that are much more stringent
than those imposed by other economies over the same type of products, it may not be commerciallyG/IT/SPEC/Q2/6
Page 3
viable for a manufacturer to meet the stringent requirement of one particular economy to which he
exports.  In cases where domestic manufacturers are given an advantage over other manufacturers, the
technical regulation or standards will become a major barrier to trade in the products concerned and
offers effective protection to domestic products.
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