WORLD TRADE  
ORGANIZATION  TN/MA/W/11/Add.5 
27 April 2006 
 (06-1984) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS  
 
Negotiating Proposal on Non Tariff Barriers 
 
in the Automotive sector  
 
Communication from the European Communities 
 
Addendum  
  The following communication, dated 20 April 2006,  is being circulated at the request of the 
delegation of the European Communities. 
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I. GENERAL REMARKS 
In line with paragraph 16 of the Work Pr ogramme adopted at the WTO Ministerial 
Conference in Doha in November 2001, and paragr aph 22 of the decision at the WTO Ministerial 
Conference in Hong Kong in December 2005, the Eu ropean Communities (hereafter “the EC”) hereby 
submit its specific negotiating proposal on NTBs in the electronics sector.   
With progressive and sometimes substantial reductions of tariffs applied on electronics 
products, partly as a consequence of the Informa tion Technology Agreement (ITA), non-tariff barriers 
now constitute the main obstacles to international tr ade in the sector. This was also one of the key 
conclusions in a recent UNCTAD report (TD/B/COM.1/ EM.28/2). The importance of NTBs is further 
underscored by the global nature of the electroni cs business. As described in the UNCTAD report:  
 The global production networks, dominated by major transnational corporations 
(TNCs) with developed countries as their home base, have been a determining 
factor in transforming the electronics i ndustry into perhaps the most globalized 
industry over the last three decades or so… by farming out production of standardized goods like electronics products to geographically dispersed locations though international subcontracting to small and medium-sized companies. 
(UNCTAD, p.4-5) 
  
This evolution in industry structure toward  globally integrated production processes has 
clearly implied a win-win situation for WTO Member s at different levels of development. Many 
developing countries have been the main benefici aries of these global production networks. In a 
number of the most rapidly growing product seg ments in electronics, developing countries now 
account for one half or more of world exports.   
But NTBs continue to impede international trade in electronics. NTBs that raise the cost for, 
or even prevent, global sourcing ha ve proved particularly costly to the industry. And in light of the 
prevalence of globalized industry in electronics, th ese NTBs are equally damaging to the interests of 
both developed and developing countries.  TN/MA/W/11/Add.5 
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  Given the significant trade distortions caused by these measures, and the importance of this 
sector for developed and developing countries alik e, the EC proposes to establish disciplines that 
would lead to the elimination of many of the burdensome non-tariff barriers in electronics. In this respect, the UNCTAD report and statements by i ndustry associations from Korea, Japan, EU, US, 
Philippines and India
1 have all highlighted the importance of addressing divergent, duplicative and 
burdensome national standards, technical regula tion and conformity assessments procedures. The 
proposed EU disciplines outlined here thus build on , but also further develop, add precision to and 
facilitate, the implementation of the WTO Agre ement on Technical Barriers to Trade (TBT 
Agreement) for the electronics sector.  II. MAIN BARRIERS FOR THE NTB NEGOTIATIONS IN NAMA 
Based on both a market access analysis carried out for the EC electronics sector, as one of the 
main drivers for global sourcing, and the NTB notifications
2 in this sector by other WTO members to 
the Negotiating Group on Market Access (NGMA), a number of key non-tariff barriers have been 
identified for the NTB negotiations in NAMA. 
 
1. Non-recognition of international standards  
Recognition of relevant international sta ndard-setting bodies and greater reliance on 
international standards would increase the similarity of regulatory environments  and thus facilitate the 
access and presence of firms into, and within, intern ational markets. Firms would find it easier to 
export products to foreign markets if they can ma ke their products and test them according to one 
standard and be accepted in different markets wit hout product modification and/or local re-testing. In 
addition to benefits for enterprises, WTO Member s would also gain from the widespread use of 
international standards as their application would as sure the efficient achievement of high safety, 
health and environmental standards.   
It should also be noted that creating and adopti ng an international standard means lower costs 
for domestic regulators who therefore do not need to create and adopt a national standard. While 
complying with international standards may involve some costs to the domestic industry in the short run, compliance with international standards impli es that domestic companies are able to achieve 
better market access to third countri es and are more likely to draw the benefits of globally integrated 
production processes.  
 
2. Lack of transparency and openness in  domestic standardization processes  
Greater transparency and openness in domestic standardization work in those areas where 
international standards do not exist would redu ce the opportunities for specialised interests to 
“capture” the regulatory process and to restrict mark et access through standards that fit the strength 
and the particularity of one particular domestic industry to the detriment of outward and export-
oriented domestic industries. Non-transparent pro cedures in domestic standardization also hinder 
development in that they make it more difficult for domestic companies to develop in line with 
international markets. This may also create obstacles for inward investment.  
 
                                                     
 
1 Various statements by these industry associations were distributed at the informal electronics NTB 
meeting, hosted by Korea, on 7 June 2005. 
2 See “NTB Notifications: Secretar iat Compilation of the various Barriers Notified in TN/MA/W/46”, 
document JOB(05)/85/Rev.1.  TN/MA/W/11/Add.5 
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  3. Unnecessarily burdensome and duplicative conformity assessment procedures 
Greater reliance of business friendly conformity assessment (CA) procedures, especially for 
low risk products, would reduce costs placed  on exporters by unnecessarily burdensome and 
duplicated testing requirements and multiple certifica tions. The cost saving could be substantial and, 
only in US-EU bilateral trade, has been estimat ed to amount to 1.3 billion euros annually for 
companies and consumers. Such business friendly c onformity procedures should not be conducive to 
reduced quality controls of the products put on the markets.   
III. PROPOSED DISCIPLINES FOR DISMANTLING NTBS IN ELECTRONICS 
The EC proposes to reduce or as appropriate eliminate non-tariff barriers for the electronics 
sectors following the vertical approach recognized in paragraph 22 of the Hong Kong Ministerial 
Decision.   
1. Standards 
WTO Members shall recognize the Internationa l Organization for Standardization (ISO)/ 
International Electrotechnical Commission (IEC) and the International Telecommunication Union 
(ITU) as the international standard setting bodies in electronics. When relevant  international standards 
developed by the international bodies exist, WTO Members shall use these in ternational standards as 
a basis where technical regulations are required (i n accordance with Article 2.4 and Annex 3 of the 
WTO TBT Agreement). WTO Members shall play a full part, within the limits of their resources, in standardisation processes of international standardisation bodies. 
 
2. Transparency 
In those cases where it is necessary to develop a na tional standard, or a standard that is not in 
accordance with international standa rds, following the lines of Article 2.9 TBT, WTO Members shall 
have a transparent and open decision making process for “stakeholder” consu ltation including public 
consultations and, where appropriate, regulatory impact assessments. 
 
3. Product conformity assessment procedures 
WTO Members shall use the suppliers’ declaration of conformity (SDoC) for low risk ICT 
and consumer electronics products. SDoC is a pro cedure by which a supplier gives written assurance 
that a product, process or service conforms to spec ified requirements. SDoC can facilitate market 
access without prejudice to the fulfilment of legitima te policy objectives, when it is combined with 
effective product liability laws, well developed market surveillance systems and penalties for false or 
misleading declarations.  
While SDoC shall be the preferred conformity  assessment procedure, where SDoC cannot be 
applied for legitimate reasons, WTO Members shall accept testing results of conformity assessment 
bodies of third parties.  
4. Technical regulations 
In accordance with Article 2.2 of the TBT Agreement, WTO Members shall limit their 
regulations to basic safety and other public inter est requirements (e.g. EMC, avoidance of harmful 
radio  interference,  environmental  requi rements).    Interoperability   or   obligations   to  use   certain  TN/MA/W/11/Add.5 
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  technologies should, in general, not be regulated unless based on international standards.  Technical 
regulations should be limited to these public in terest requirements. Other measures to protect 
consumers, such as product liability, are best achieved by horizontal regulation.   
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