WORLD TRADE
ORGANIZATIONG/IT/SPEC/Q3/6
16 October 2002
(02-5582)
Committee of Participants on the Expansion
of Trade in Information Technology ProductsOriginal:  English
NON-TARIFF MEASURES WORK PROGRAM
Communication from the United States
The following communication, dated 11 October 2002, has been received from the Permanent
Mission of the United States.
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I. INTRODUCTION
While the ITA made great strides in eliminating or lowering tariffs on Information
Technology (IT) products, U.S. information technology industries are still facing some formidablemarket access hurdles in the form of Non-Tariff Measures. In consultations with industry, it is
obvious that there is widespread concern over the various NTMs the global IT industry faces,
specifically in the areas of conformity assessment, regulatory process and procedures, standards, rules
of origin requirements and customs procedures.  These NTMs can negate the free market benefits of
the ITA and the intent of ITA participants.  While various NTMs were identified in WTO Membersubmissions, five areas of concern emerge as most problematic. They also reflect the concerns of the
U.S. information technology and telecommunications industries.
II. EXAMINATION OF THE ECONOMIC AND DEVELOPMENTAL IMPACT OF
SUCH MEASURES ON TRADE IN ITA PRODUCTS
A. C
ONFORMITY ASSESSMENT , TESTING AND CERTIFICATION
The lack of harmonized conformity assess ment procedures, especially when a single
internationally recognized standard/regulation is  accepted by each of the countries involved,
can result in increased costs due to duplicative/multiple testing and certification, prolonged time
to market, uncertainty and unpredictability related to contacting approval authorities,
certification bodies or laboratories in other countries.   Most ITA participants share the same
regulatory objectives with regard to ITA products, i.e. protection of health and safety (mainly relatedto electrical safety), electromagnetic compatibility, efficient use of radio spectrum resources and
protection of the public network. There also are internationally recognized safety and electromagnetic
interference standards for many IT products (i.e. IEC 60950, CISPR 22 and 24).  Many governments
that regulate in these areas have adopted thes e international standards and this international
harmonization has greatly facilitated trade.  However, the proliferation of variations in the approachon regulations in the area of conformity assessment (testing and certification) is now seriously
diminishing the benefits of these international standards and undermining the progress made in trade
facilitation in IT products through the ITA.
Conformity assessment procedures that are more burdensome than necessary result in
delay in time to market and ultimately impact the consumer, without any benefit to health and
safety.   The global regulation of EMC/EMI illustrates this point and has been highlighted in a number
of Member submissions.  In countries that regulate EMC, regulatory requirements for IT
products/components are based on the IEC/CISPR standards.  However, there are a variety ofG/IT/SPEC/Q3/6
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approaches to conformity assessment requirements ranging from Supplier’s Declaration of
Conformity to third-party certification. Considering th at EMC risk for IT products is considered to be
low, it would behoove Members of the Committee who regulate in this area to consider reviewing
their regulations to ensure that they are indeed a ppropriate to the risk involved and not undermining
the objective of the ITA in facilitating trade in IT products.  To this end we support the pilot projecton EMI/EMC conformity assessment for ITA products proposed by Canada.
hen regulations require the submission of test reports or evidence of certification, the lack of
acceptance of test reports and certification results in redundant testing and certification procedures
that can impede trade in IT and unnecessarily burden manufacturers.
B. R
EGULATORY PROCESS AND PROCEDURES
Certain aspects of regulatory systems and requirements should be considered as NTMs
when they are not proportionate to risks involved, nor based or supported by internationally
recognized standards, nor limited to protecting public imperatives, lay down detailed technical
requirements, or hinder innovation.   These lead to costs and delays to the market with no
value-added to the consumer or public interest.
Since the early 1990s, many governments have increased their use of regulations that govern
high-tech products. As a result, the IT industry is experiencing a variety of regulatory issues that can
be viewed as NTMS, including lack of transparency  in government regulation, multiplicity of bodies
with responsibility for administering regulations, and deficient coordination among regulatory bodies.In some countries, the focus of regulation has been on environment, health, and safety (EHS)but it is
also expanding to include regulation and product requirements for privacy, security, and
electromagnetic compatibility. We are concerned that this regulation is having an increasingly
significant impact on industry in three ways:
Cost: The marked increase in government regulatory action is placing, in many instances,
costly and unnecessary burdens on high-tech companies’ and their ability to innovate, provide
increased consumer choice, enhance product functionality, and offer affordable product
prices.
Market Access: Regulations serve as a barrier to companies entering the international
marketplace. They reduce access to the latest technology by consumers in smaller economies
because requirements of market size force high-tech manufacturers to the largest markets with
the fewest regulatory barriers.
Competitiveness: There are competitiveness implications for the high-tech industry because
some regions promote their regulatory model in bilateral negotiations to the detriment of 3rd
country industries.  We are concerned about the bad example these regulatory actions set.
Countries may look to increased use of high-tech product regulation as a way of protecting
their markets and embark on their own product regulation initiatives in a similar manner.
NTMs have also been identified as re sulting from “ voluntary” but de facto
requirements, often referencing standards which many times have a quasi-regulatory status or
government or legislative sponsorship.  In many cases these regulations and the process under which
they were developed do not demonstrate the necessary level of transparency, accountability,
justification, openness, impartiality, effectiveness, technical coherence and constitution.G/IT/SPEC/Q3/6
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C. STANDARDS
We are supportive of international standards development organizations and the
adoption of internationally recognized volun tary standards.  Howe ver, the development,
content, and application of some governmental regulations based on standards could be
considered NTMs.   For example, divergent non-market driven national standards can be used to
protect local industry, and more importantly, require manufacturers to redesign their products for a
specific market, hindering trade. As a result of unique national standards and frequency allocation,
manufacturers must redesign products, carry out testing and certification against multiple standards,
experience prolonged time to market, and endure uncertainty as to what standards, national deviations
etc. actually apply.
Standards referenced in regu lations that go beyond the basic protection requirements
act as an NTM, requiring manufacturers to redesign for a specific market and slow the flows of
trade in IT.   The industry has reported that, in some cases, international voluntary standards are
developed for a particular perceived market application and then adopted into a regulation.  This in
itself may not be an NTM if it is, in fact, addressing a particular perceived market need.  However, the
problem arises when another country adopts the same standard as a regulation without theaccompanying perceived market need.  As IT equipment becomes more and more pervasive in our
homes and workplaces some countries may be feeling the need to regulate these products more.
Regulators should be cautious in adopting internatio nal standards, solely based on the fact that they
are international.  Rather, they should first be sure that the standard they choose is actually
appropriate to achieve the regulatory objective.
D. C
ERTIFICATE OF ORIGIN MANDATES
A certificate of origin requirement is an additional, unnecessary documentation requirement
that effectively undermines the benefits of the ITA and consequently has become a significant NTM
for trade in IT and telecom products. A certificate of origin requirement can be extremely burdensomein that it can take a full shipping day (or long er if the shipment is scheduled for delivery on a
weekend) to get a certificate of origin approval from the exporter’s shipping country.  Even a one-day
delay can add millions of dollars in storage and other fees for products that are awaiting shipment to
their final destination.
The information submitted as part of the usual required customs documentation (i.e., a goods
declaration and/or invoice) is already sufficient for providing the information necessary to enter the
shipment and protect the revenue, commerce and customs laws of the importing country.
Furthermore a certificate of origin requirement is very costly especially in the absence of an
explanation of the intent underpinning the requirement, making its utility in the import process
difficult to understand.
E. C
USTOMS PROCEDURES
Customs procedures act as an NTM when they involve cumbersome, non-transparent and
overly bureaucratic procedures related to obtaining customs clearance and/or marketing authorization.
This results in increased costs, including those for additional human resources required to carry out
customs procedures, and indirect costs related to time, undue delays at borders, and costs related toincreased uncertainty and unpredictability.G/IT/SPEC/Q3/6
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III. THE BENEFITS WHICH WOULD ACCRUE TO PARTICIPANTS FROM
ADDRESSING THEIR UNDUE TRADE-DISTORTING EFFECTS
The WTO itself states that, “Although it is difficult to give a precise estimate of the impact on
international trade of the need to comply with diffe rent foreign technical regulations and standards, it
certainly involves significant costs for producers and exporters"1.  While this is true, the explanations
above identify practices that can be NTMs to trade in IT and telecommunications products, negatively
impacting the IT industry and undermining the important progress made in trade facilitation by the
Information Technology Agreement.  The variety of studies listed in the Secretariat’s Compilation of
Submissions, as well our consultations with US industry substantiate the impacts of these NTMs on
trade and the need for some means to address them.
The 1998 U.S. International Trade Commission Staff Research Study, “Global Assessment of
Standards Barriers to Trade in the Information Technology Industry," through numerous industry
examples concludes that standards-related measures (including technical regulations, testing and
certification) are among the most important and costly trade barriers for manufacturers of IT
products"2.  The industry still finds this to be true today.
As the IT and telecommunications industries have grown and matured since the
implementation of the ITA, they have also become truly global industries.  As the technical standards
for IT have generally been globally harmonized, manufacturers are seeking to design one product for
the global marketplace.  However, the obstacles presented by differing national regulations
implementing these standards, unique testing and certification requirements, lack of portability ofconformity assessment data, rules of origin requirement and burdensome customs procedures are
inhibiting trade and slowing down global consumer access to the latest technology.  There is no doubt
that removing these obstacles would facilitate trade in ITA products and benefit global consumers, by
allowing them access to affordable cutting-edge technology and also to society as a whole by
facilitating deployment of IT in a variety of  business and industry sectors, encouraging economic
growth and productivity.
Increasingly we are seeing the benefits from the use of information technology, including
important productivity and efficiency gains, cost savings, increased competition, accelerated
innovation and entrepreneurship, job creation associated with higher wage rates, and the important
promotion and acceleration of economic development.  ITA participants appreciated these benefits
and sought to advance trade in IT products to realize these benefits for their economies. The UnitedStates hopes the benefits accrued as a result of forming the ITA are just the beginning and looks
forward to new opportunities for further tariff elimination through WTO accessions as well as through
the new negotiations in non-agricultural goods market access. The United States also encourages ITA
participants to continue to seek to address th e NTMs that are increasingly counteracting the trade
facilitation benefits realized from the ITA and obstructing trade in IT and telecommunicationsproducts.
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1 http://www.wto.org/english/the wto_e/whatis_e/eol/e/wto03/wto3_4.htm
2 Office of Industries, US International Trade Commission, Publication 3141, November 1998, p.5-1.