RESTRICTEDWORLD TRADE
ORGANIZATIONG/IT/SPEC/Q3/3
2 August 2002
(02-4275)
Committee of Participants on the Expansion
of Trade in Information Technology ProductsOriginal:  English
PHASE II OF THE ITA NON-TARIFF MEASURES WORK PROGRAMME
Communication from the European Communities
The following communication, dated 19 July 2002, has been received from the Permanent
Mission of the European Communities.
_______________
I. INTRODUCTION
The European Communities (EC) has based it analysis for Phase II of the work programme
on, inter alia, submissions made by ITA members, further consultations with industry, recentpublications from the OECD and work of UN/ECE and studies related to the creation of the EU
Single Market.
II. REVIEW OF NON-TARIFF MEASURES IDENTIFIED BY ITA PARTICIPANTS
2.1 General Observations
In reviewing the submissions to Phase I, the EC would like to highlight the following general
observations. The NTMs identified by ITA members can be placed in the following broad categories:
- Technical regulations, standards and conformity assessment requirements (“TBT related
NTMs”).
- Import licensing and customs procedures.- Rules and certificates of origin.
- Government procurement.
These NTMs have been identified as having a negative and distorting impact on trade in ITA
products since they in particular introduce 1) additional cost; 2) time delays; and 3) uncertainty. Ingeneral terms the reason for this seems to relate to the following:
- Complicated, cumbersome and non-transparent regulatory requirements and procedures.
- Excessive paper work and administrative requirements and procedures.
- Involvement of several regulatory/administrative bodies with little or no co-ordination
between them.
With regard to TBT related NTMs, which seems to be the main NTM identified, the reasons
for the negative and distorting impact on trade also relate to differences in regulatory approaches,G/IT/SPEC/Q3/3
Page 2
standards and conformity assessment requirements as well as non-acceptance of test reports and
certificates. The remainder of this document will limit itself to examine TBT related NTMs.
2.2 TBT related NTMs
From the submissions made to Phase I and from other information sources it seems quite clear
that TBT related NTMs give rise to obstacles to trade resulting in increased costs and burdens to
economic operators which in its turn can lead to unnecessarily higher consumer prices, reduced
product choice, non-availability of new technologies etc. However, this does not mean that there are
no legitimate public interests that need to be protected through regulations. Review of the submissions
and studies available, in particular two recent studies from the OECD1, indicate that although there are
differences between countries in respect of how these regulatory issues are dealt with, there are alsoseveral commonalties.
It seems that most ITA participants share to a large degree the same regulatory objectives
with regard to ITA products, i.e. protection of safety and health (mainly related to electrical safety),
electromagnetic compatibility, avoiding interf erence and certain telecommunications equipment
specific requirements (mainly protection of the public network). Other important commonalties relate
to the technical basis for dealing with many of  these regulatory objectives, i.e. the relevant
international standards (such as IEC 60950, CISPR 22 and 24). Where there are differences these
relate to, for example, not all countries regulating EMC for ICT products (although these countries
operate “voluntary” certification schemes), for telecommunications equipment some countries alsoregulate interoperability and “quality” aspects (e.g. clarity of voice telephony, speed of data
transmission). Furthermore, additions and/or modifications are sometimes made to the relevant
international standards when using them for regulatory purposes. The reason for and nature of the
additions and/or modifications are often unclear and are presented in a non-transparent manner. This
leads to uncertainty for manufacturers, in particular small and medium sized enterprises, that havedesigned their products according to the international standards.
The main differences in regulatory approach seems to relate to conformity assessment
requirements, where ITA members seem to rely on either supplier’s declaration of conformity or third
party approval (either private or government body). However, a number of variants exist, as identified
in the recent OECD studies mentioned above, which adds further complexity to marketing ITA
products on a either a global basis or in relation to individual countries. The difference in conformityassessment requirements is in a sense surprising if countries more or less share the same regulatory
objectives.
Another TBT related NTM identified by ITA participants is the non-recognition of test
reports and certificates issued by “foreign” conformity assessment bodies. Mutual recognitionagreements can help in this respect. Reliance on the mutual recognition arrangements established
between accreditation bodies at the internationa l level (ILAC and IAF) and between the national
measurement institutes (BIPM) could also alleviate the problem of non-recognition. However, the EC
believes there are additional and sometimes even more efficient ways of addressing the TBT related
NTM identified and at the same time ensuring that legitimate public interests are a protected through,for example, convergence of regulatory approaches, improved transparency in regulations and
deregulation where appropriate.
                                                     
1 “Tackling Non-Tariff Measures in ICT Sector: Survey of Developed and Developing Countries”
TD/TC/WP/(2001)44/Rev1, June 2002 and “Standards related Barriers and Trade Liberalisation:
Telecommunications Sector Study” TD/TC/WP(2001)11/Final, March 2002.G/IT/SPEC/Q3/3
Page 3
III. ECONOMIC AND DEVELOPMENT IMPACT OF TBT RELATED NTMS
3.1 General
Empirical economic analysis of the effects of TBT related NTMs to trade and economic
development is limited. The main reason being th at the costs related to TBT related NTMs are
difficult to quantify. This concerns both more direct costs related to redesign and multiple testing and
certification and to indirect costs in the form of delays to market introduction, information gathering,
administrative burdens and overheads etc. A further complicating factor is the existence of de facto
“voluntary” certification and marking schemes, which can impose barriers to trade just as effectively
as mandatory regulations. The transparency in these schemes is not always obvious and are often
justified on the grounds that they are “market driven”.
Nonetheless, there are estimates that indicate that the overall impact of TBT related NTMs on
trade in ITA products is substantial. The US Inte rnational Trade Commission mentions some of these
estimates in its report “Global Assessment of Standards Barriers to Trade in Information Technology
Equipment”2. For example, the US Department of Commerce estimated that USD 66 billion of the
USD 110 billion in US exports to Europe in 1993 were subject to EU required product certifications,whereof USD 10 billion primarily related to IT products, also the Information Technology
Information Council (ITI) has estimated that duplication of mandatory US and EU testing and
certification for computers, telecommunications equipment and other IT products costs US companies
and consumers more that USD 1.3 billion annually
3. Correspondingly, it seems safe to assume that
EU exporters to the US experience comparable cost s Additional estimates in relation to the EU Single
Market are given below.
Despite a certain lack of empirical data, repeated qualitative surveys with industry have
always shown that TBT related NTMs are a clear impediment to trade. In this respect the aspect that
causes most concern is delays in market introduction as the speed of innovation in ITA products andshortening product life cycles are being accelerated.
3.2 Experience from creating EU Single Market
As pointed out in its submission to Phase I, the EC has, in creating the Single Market,
considerable experience in dealing with TBT related NTMs. The EU regulatory environment has
evolved from one based on national regulations of the EU Member States to one single regulatoryregime based on common regulatory requirements and conformity assessment procedures and
recourse to voluntary European harmonised standards, which are based on the corresponding
international standards.
Before the launch of the Single Market in 1992, the EU market for telecommunications
equipment could be characterised as highly fragmented national markets with very limited intra-EU
trade and substantial price differentials between Member States. Some of the main reasons underlying
this were related to closed national procurement markets, different technical requirements and
standards, non-recognition of type approvals and no competition in provision of telecommunication
services. As part of the Single Market Programme (SMP), the Commission issued in 1987 a GreenPaper on a common market for telecommunication services and equipment
4. The Green Paper set out
                                                     
2 Office of Industries, US International Trade Commission, Publication 3141, November 1998.
3 It should be noted that this was based on a situation when the EU still had a regulatory regime for
telecommunication products based on mandatory standards and third party approval, which has now beende-regulated and liberalised.
4 European Commission, Toward a Dynamic Europ ean Economy: Green Paper on the Development of
the Common Market for Telecommunication Services and Equipment, COM(87) 290 final (Brussels, 1987).G/IT/SPEC/Q3/3
Page 4
a number of measures to be implemented in view of achieving the objectives of liberalising services,
opening up national borders in the terminal equipment market and providing open access to the
telecommunications infrastructure. Among these measures were the harmonisation and recognition of
type approvals and support to standardisation activities (ETSI was subsequently created), as well as
for the harmonisation of radio frequency allocations for certain services (GSM, DECT, ERMES). TheSMP has had a considerable effect on the functioning of the European telecommunications market.
The figure below shows that intra-EU trade only took off after the SMP was put into place.
Source: Comext database. 8471 is automatic data processing machines and units thereof; magnetic or optical readers, machines fo r
transcribing data onto data media in coded form and machines for processing such data, 8517 is electrical apparatus for line te lephony or
line telegraphy, including such apparatus for carrier-current line systems, 8525 is transmission apparatus for radio-telephony,  radio-
telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus of sound recording or reproducin g apparatus;
television cameras (excl. camcorders capable of recording television programmes using an external video tuner), 8542 is electro nic
integrated circuits and microassemblies
3.2.1 Study on the impact of the Single Market for telecommunications equipment
Both in the wake and aftermath of launching the Single Market in 1992, the European
Commission has carried out studies to assess the impact of the SMP on the European economy. The
Commission also continues to review and assesses the functioning of the Single Market and publishes
these results in, for example, the Internal Market Scoreboard. In 1996 the Commission carried out aseries of studies to assess the progress made in implementing the SMP since 1992, one of which was
related to telecommunications equipment
5. The description below gives an overall account of the main
                                                     
5 European Commission, Single Market Review Sub-series I, Volume 8: Telecommunications
Equipment, 1997. A summary of this report can be found at:
http://europa.eu.int/comm/internal_market/studies/stud21.htm.Intra-EU trade in certain ITA products 1988-2001
(EUR million)
0100002000030000400005000060000
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
20018471
8517
8525
8542G/IT/SPEC/Q3/3
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findings of the report and in particular as they relate to the impact of the measures related to removing
NTMs6. In this respect the report reflects the situation of when it was prepared, i.e. 1996.
First of all it should be mentioned that it is difficult to isolate the impact of the SMP from
other factors driving change (for example technological change, in particular digital integratedcircuits, played a major role during the 1980s) and the specific contributions from individual SMP
measures. The main conclusion of the study is that the primary impact of the SMP has been to
accelerate the reduction of EU equipment prices by changing the purchasing behaviour of Europe’s
telecommunications operators (TO). The SMP has also made a considerable contribution to increasing
the competitiveness of EU equipment manufacturers.
The sections below give an account of the economic effects of the SMP measures as they
relate to removing non-tariff barriers and in particular those related to technical barriers to trade.
Competitiveness and productivity effects
The SMP measures have contributed to the global competitiveness of European
telecommunications equipment manufacturers in two ways:
1. By increasing the competitive intensity of the domestic markets of European manufacturers
and accelerating the development of a large integrated pan-European market.
2. Through specific contributions to individual developments, such as GSM and ISDN, which
improved the competitive position of European manufacturers.
The SMP has increased the competitive intensity  of European equipment markets by altering
the procurement behaviour of the dominant customers of telecommunications equipmentmanufacturers, the national telecommunications operators, by accelerating the breakdown of the
managed national monopsonies of the TOs and by removing most of the artificial restrictions on
market access.
Scale and scope effects
There are increasingly significant underlying economies of scale for many categories of
telecommunications equipment, and the ability of manufacturers to benefit from  these  economies of
scale is an important determinant of their competitive strength. The corporate strategies of the
equipment manufacturers in the 1980s and 1990s have been largely driven by the need to access
economies of scale. Scale economies are increasing because of the following trends: 1) increasing
product development costs, 2) increasing software content, 3) increased content of customizedintegrated circuits, 4) increased cost of production assets, 5) increased learning-curve effects, 6)
reduced mechanical and electro-mechanical content.
The creation of the EU Single Market for telecommunications equipment has had a beneficial
effect on the ability of EU manufacturers to achieve levels of production that match the opportunityfor scale effects. Although the impact of SMP is difficult to separate from other drivers of scale and
scope effects, two mechanisms of the SMP have improved opportunities for manufacturers to access
scale economies:
1) Increasing market size . The removal of restrictions on market access and harmonisation of
markets (see below) effectively enlarges the market for an individual equipment product, and
                                                     
6 The report expresses the views of the authors and does no express the Commission’s official views.G/IT/SPEC/Q3/3
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enables scale economies in product development, manufacturing and distribution to be
accessed without incurring significant customisation or replication costs.
2) Increased manufacturers’ confidence about the size of the market and their likely share.
In order to achieve scale economies it is (in general) necessary to anticipate future market sizeand invest in production systems that deliver the benefits of scale. The risks of such
investments are reduced if the manufacturer is confident that the market for its product will
develop in a predictable way. Standards play an important role in increasing manufacturers’
confidence in this respect (e.g. the effects of the ATM standards, GSM standards, G3 fax
standards).
The report assesses that the SMP has had a high effect on opportunities to access scale effects
for in particular manufacturers of terminal equipment and above all for small and medium sized
companies. Removal of different approval requirements and technical harmonisation have enabled
such companies to increase their volumes withou t incurring the costs of addressing fragmented
national markets (the report also includes a very illustrative case study in this respect).
Market access effects
The SMP has effectively removed legal, procedural and administrative barriers related to
approvals and technical requirements that existed before the Single Market. The impact of these
results, on for example market shares or market structure, had not been dramatic five years after theirintroduction. One of the reasons for this is that the large and well resourced companies could
overcome such barriers through “multi-domestic” manufacturing strategies (in this respect such sub-
optimal strategies could, with the Single Market in pl ace, be scrapped in favour of taking advantage of
the economies of scale offered).
The SMP’s improvement of market access is particularly important for the terminal
equipment sector, where non-EU imports are much more significant than imports of switching or
transmission equipment, and where most of th e small and medium sized EU telecommunications
equipment manufacturers are active. Import penetration into the EU had risen steadily since the mid
1980s. In 1985, imports accounted for 14% of the total EU market for telecommunications equipment.
By 1992 this figure had risen to 23% and was still increasing. Even in this respect the report has not
been able to quantify observable impacts that can be directly attributed to the SMP measures.However, the conclusion is that in the absence of the Single Market, it would undoubtedly be more
difficult to obtain approvals for equipment in many national markets and the only route to market
would be via the national telecommunications operator. Many SMEs which are benefiting from
cheaper, quicker and easier approvals for their equi pment would have been deterred from their efforts
in the absence of the SMP.
Direct production cost effects
Although a wide range of specific and horizontal measures in the SMP have focused on
matters relevant to production costs (analysis related scale and scope effects treated elsewhere) andmany of these measures have had positive effects for SMEs, these measures have not had a
measurable effect on actual production costs measured at a sectoral level because of the domination of
the sector by large firms. With regard to SMEs, although the actual level of production cost savings
will vary considerably depending on the size, products and target markets of each firm, the major
categories of production cost savings for SMEs arising from the impact of the SMP are:
- Cheaper, quicker and more predictable approvals process.
- Reduced costs of bureaucracy for cross-border sales.G/IT/SPEC/Q3/3
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- Technical harmonisation, reducing the need to re-engineer products for different national
markets.
Evolution of final prices
In the mid-1980s, before the introduction of the SMP, the key features of EU
telecommunications equipment pricing were as follows:
- Average EU equipment prices were estimated to be approximately 50% higher than
“competitive world prices” (US domestic telecommunication equipment prices), with the
various caveats concerning the comparability of different prices. A more conservative
estimate puts the average price premium to 20%.
- Significant price differences existed between European national markets for each category of
telecommunications equipment, confirming that the European market was strongly partitioned
into distinct national markets.
The premiums that were observed in European telecommunications equipment markets in the
mid-1980s were substantially reduced in the ten-year period from 1985 to 1995. The price
differentials between individual national markets within the EU have also been substantially reduced.
The table below gives the estimated changes in EU price premiums.
Estimated average EU equipment price premiums 1985 to 1995
1985 1995
Public switching 60% 24%
Transmission equipment 38% 5%
Customer premises equipment 52% 25%
Approximate overall average price premium
“Corrected” price premium50%
20%20%
8%
These figures are subject to certain caveats that are explained in the report and have also led
to a “corrected” price premium. However, even given the caveats it can be concluded that the
purchasers of telecommunications equipment are achieving significantly better prices in the mid-
1990s that was the case in the mid-1980s, both in absolute terms and relative to competitive worldprices. Taking the conservative 12% reduction in EU price premiums and applying this to a 1993
estimate of the EU equipment market of EUR 16.9 billion, European purchasers are avoiding annual
expenditure of approximately EUR 2 billion th rough the reduction in EU price premiums.
Effects on consumers
The impacts of the SMP on the telecommunications equipment sector are benefiting
consumers in three main areas:
1. Enabling cheaper and better residential telecommunications equipment . The SMP has
brought greater competition in the markets for residential equipment (CPE) such as handsets,
answer phones, home faxes and modems and contributed to the significant improvement in
the range of products available and the range of retail outlets through which they can be
purchased or leased. Based on the analysis of the effect on prices, residential CPE prices in
the EU in 1985 averaged 50% more than those in the USA. This premium is estimated to have
fallen to approximately 25% by 1995. A significant portion of this reduction in premium can
be attributed to the SMP measures.G/IT/SPEC/Q3/3
Page 8
2. Allowing cheaper telecommunications services . Although there is no robust quantified
relationship between telecommunications equipment and services prices, the falling unit
prices of equipment provide a falling “floor” for services prices, and the contribution of the
SMP to equipment price falls has assisted this trend in Europe. The figure below gives
3. Contributing to cheaper and better mobile services . The SMP has made valuable specific
contributions to the success of the GSM standard, which has benefited EU manufacturers,
operators and users. The almost universal deployment of the GSM system in Europe has made
high-functionality mobile services widely available to business users, and the success of the
system in the business sector is leading to affordable services for consumers (through a
combination of scale and competition effects.
3.2.2 Further liberalisation of the EU  telecommunication equipment market
The SMP measures initially taken with regard to removing TBT related NTMs (on which the
study described above is based on) were centred on harmonising the individual Member State
approval procedures and introducing common techni cal standards. Although this measure, together
with others related to e.g. support of standardisation, removed the majority of TBT related NTMs in
the EU, it was done on an approach based on third party approvals and mandatory technical standards.
In view of further contributing to a competitive and innovative environment without unnecessary
market access impediments, the Directive on radio and telecommunications equipment (RTTE
directive) was introduced in March 1999. The RTTE directive replaced previous EU directives andsome 1,500 national technical regulations that were still in place and introduced an open competitive
system that relies on self-regula tion by industry wherever possible.
The RTTE directive has to a very high degree deregulated and liberalised the placing on the
EU market of radio and telecommunication terminal equipment. The main features of the RTTEdirective and changes introduced compared to the previous regulatory regime are the following:
- Introduction of manufacturers' declaration of conformity:  Assessment of the conformity
of a product with the requirements of the Directive becomes a responsibility of the
manufacturer. The manufacturer does not need to obtain further approval certificates from an
official body after having passed tests in a legally recognized laboratory.
- Lower requirements:  Terminal access requirements have been removed. Fixed network
terminal equipment therefore only needs to co mply with electrical safety and electromagnetic
compatibility requirements. Radio equipment needs to effectively use the spectrum and not
cause harmful interference. In exceptional cases the EU can introduce additional public
interest requirements. This is for the time be ing only foreseen for safety critical radio
equipment on sea and inland waterway vessels.
- New approach to standards:  Requirements are legal, not technical. Voluntary standards will
continue to play a prominent role in determining whether a product complies with the legal
requirements. When standards are however not available or not appropriate, a manufacturerstill has a route to the market. However, in such a case the manufacturer needs to demonstrate
more extensively how the requirements of the Directive were met in its technical file.
- Scope - Complete coverage of the sector:  The Directive replaces national regimes. Any
problems caused by the fact that the frequency spectrum in the Community is not fullyharmonised are handled through specific provisions in the Directive.
- Obligation for network operators to publish their interfaces:  The Directive obliges
operators of public telecommunications services to publish the characteristics of theirG/IT/SPEC/Q3/3
Page 9
interfaces, thereby allowing any manufacturer to construct terminal equipment to be attached
to that network
- Obligation for Member States to publish  the rules to access the radio frequency
spectrum:  The radio frequency spectrum is not fully harmonised in the Community. The
Directive doesn't harmonise the spectrum. It is therefore of major interest to manufacturers to
be fully aware of national differences in allocation and usage. Member States therefore are
committed to publish such details allowing manufacturers to build products capable of
operating in as large a market as possible.
- Obligation for Manufacturers to inform the end user of intended use and limitations of
use: The Directive obliges manufacturers to in extenso inform users of the intended use and
the limitations of use both on the packaging and in the manual. This means, that the
manufacturer needs to inform the user on the networks for which a terminal has been
designed and communicate clearly for which of the radio spectra of the Member States it has
been designed.
In the Internal Market Score board the Commission reports on some of the initial impacts of
the RTTE directive7. The RTTE directive has made a major contribution to the development of the
mobile telephone market in the EU by removing  regulatory problems with handset testing and
approval procedures and thus facilitating the full exploitation of the benefits of the GSM standard.
This has helped to develop a competitive and vi gorous EU industry with world market shares in
mobile phones exceeding 50%.
3.3 Development aspects
As with the economic impacts of removing NTMs, empirical data related to development
aspects are not readily available, if at all. Howe ver, many of the findings related to the economic
impact of NTMs for trade in ITA products and the benefits of their removal are also relevant for
developing countries, both in relation to promoting exports and ensuring availability of innovative
technologies at competitive prices.
The OECD report “Tackling Non-Tariff Measures in ICT Sector: Survey of Developed and
Developing Countries” highlights the importance of the availability of ICT products in view ofpromoting participation of in particulars SMEs in the electronic market places. The report states that:
“The elimination of non-tariff measures on ICT products will reduce the cost of ICT infrastructure,
which in turn will help to build the physical infras tructure for the global electronic marketplace in the
New Economy. However, ICT products also provide significant externalities for all industries by
helping this industries to engage in electronic commerce (e-commerce) with significantly lower costsand by raising the efficiency of - and returns on - investment.”
The OECD report also refers to a survey by  APEC where more than 70% of the respondents
recognised that using e-commerce to reach inte rnational markets is important, particularly in
developing countries (Chile, China, Indonesia, Malaysia, Mexico, Papua New Guinea, Peru,Philippines, Russian Federation, Thailand and Vietnam). Furthermore a survey by the European
Commission shows that enterprises having access to the Internet and using e-commerce are more
frequently exporting than those who do not use e-commerce.
                                                     
7 European Commission, Internal Market Score Board nr. 10, 16 May 2002, available at:
http://europa.eu.int/comm/internal_market/en/update/score/index.htmG/IT/SPEC/Q3/3
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3.4 Input from industry
On-going consultations with European industry continues to confirm that TBT related NTMs
are an obstacle to trade. In recent consultations industry has in particular high-lighted the diverging
conformity assessment requirements of ITA Members and that these procedures are many timesexcessively based on third party approvals. As mentioned before conformity assessment requirement
either take the form of a supplier’s declaration of conformity or the third party (either public or
private) approval body. However, a number of variants exist, as identified in the recent OECD study
mentioned above “Standards related Barriers and Trade Liberalisation: Telecommunications Sector
Study”, which adds further complexity to marketing ITA products on a either a global basis or in
relation to individual countries.
European industry considers that conformity assessment procedures based on supplier’s
declaration of conformity is the most appropriate for ITA products. The main reasons being it does
not cause unnecessary delays to introducing a product on the market and the risks related to ITA
products do not warrant stricter approval proced ures. The pace of technological innovation and
increased competition has shortened product life cycles to between 12 to 18 months. Even a onemonth delay with market introduction would have a significant impact by reducing sales revenues.
Additional costs may also be incurred from storage of products whilst awaiting the completion of
approval procedures. At the same time the expenditure of research and development and product
design have increased. This means that companies have shorter time periods within which to
recuperate investments made
8.
The OECD report mentioned above refers to an estimate made by US industry which
indicates that delays of, on average, four weeks for FCC product approval and registration amount to
approximately USD 100 million per year. Industry has also estimated that for wireless
telecommunications equipment approvals can delay market introduction by four to seven weeks,
while conformity assessment based on supplier’s declaration would only take approximately two days
(this has been achieved in the EU with the introduction of the RTTE directive).
Industry has also pointed to cost savings rela ted to design change and greater flexibility in
choice of components and materials that would accrue from using the suppliers’ declaration of
conformity.
The cost comparison between suppliers’ declaration of conformity (SDoC) and third party
certification and approval has been illustrated by industry in the graphic below.
                                                     
8 See also OECD report “Tackling Non-Tariff Measures in the New Economy: Interim Report”
TD/TC/WP(2001)44, November 2001.G/IT/SPEC/Q3/3
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IV. CONCLUSIONS AND POSSIBLE WAYS FORWARD
In its submission to Phase II of the NTM work programme the EC has chosen to focus on
TBT related NTMs since these seem to pose the main  concern for ITA participants. This should of
course not detract from the impediments to trade caused by import licensing, certificates of origin,
public procurement rules and other non-tariff measures.
Empirical data on and quantitative analysis of the economic and development impact of TBT
related NTMs on trade in ITA products and the benefits of addressing them is scarce. However, theestimates that exist indicate that the additi onal costs that result from TBT related NTMs are
considerable. In the US alone it has been estimated that an average delay of four weeks in seeking
product approval and registration amount to approximately USD 100 million per year. Duplicative
testing and certification of computers, telecommunications equipment and other IT products in EU-
US trade has been estimated to cost US companies and consumers more than USD 1.3 billionannually. However, this cost has, at least for US  exporters to the EU, basically been completely
eliminated with the introduction of the RTTE directive.
The creation of EU Single Market can serve as an example of the benefits that can result from
addressing of TBT related NTMs. The experience and studies available show that the removal of TBTrelated NTMs has had a considerable positive economic effect on the EU market for
telecommunications equipment. The measures undertaken to remove NTMs has contributed to, inter
alia, a considerably increased market size, lower barriers to entry, increased opportunities for
economies of scale, increased competition, increased import penetration. This has led to a significant
reduction in prices, 12-30% compared to “competitive world prices”, saving European purchasersapproximately EUR 2 billion per year.
The EC therefore considers that the availabl e information clearly shows that TBT related
NTMS have a considerable impact on trade in ITA products and addressing them in an appropriateCurrent Certification 
System’ Costs/Loss SDoC’s Costs/Loss  
 
 - Design change 
- Choice of 
components/materials - Application 
   DocumentsAB- Certification          FeesC-Market Access
  Loss
abc
  ZSDoC Economic Benefit =
(A+B+C) + (X+Y+Z) - (a+b+c) - (x+y+z)
Cost Factor
- Testing 
 & Assessment 
Y
Xz
y
xG/IT/SPEC/Q3/3
Page 12
way can result in substantial savings for consumers and end users and greater variety and availability
of products.
However, the removal of TBT related NTMs does not mean there are no legitimate public
interests that need to be protected through regulations. Although there are differences betweencountries in how ITA products are regulated, in particular with regard to conformity assessment
requirements, there are also many commonalties which offer a considerable scope for developing
common good regulatory practices for ITA products.
The proposal from Canada to carry out a pilot project on EMI/EMC conformity assessment
for ITA products is therefore welcomed and supported. Especially the proposed workshop involving
regulators where experiences, best practices etc. can be exchanged in view of possibly finding acommon way forward.
In this context the EC would also like to point to the work of the United Nations Economic
Commission for Europe (UN/ECE) in developi ng an “International Model for Technical
Harmonisation based on Good Regulatory Practice for the Preparation, Adoption and Application ofTechnical Regulations via the use of International Standards”. This could possibly offer an avenue in
addressing TBT related NTMs.
__________