|Free Trade Area of the Americas - FTAA||
The success of market reforms in the 1990s has dramatically increased trade in goods and services and stimulated investment in Latin America and the Caribbean. Through unilateral actions, multilateral disciplines, and bilateral and regional accords, countries of the Western Hemisphere have moved deliberately and systematically to create conditions conducive to the negotiation of a Free Trade Area of the Americas (FTAA) by the year 2005.
The role of trade liberalization as a motor of growth in the Hemisphere was recognized by the Heads of State and Government when, at the Summit of the Americas in December 1994, they decided to establish the FTAA. At the first meeting of Trade Ministers, held in Denver in 1995, the countries "ask[ed] the Tripartite Committee -- the Organization of American States, the Inter-American Development Bank and the United Nations Economic Commission for Latin American and the Caribbean -- to provide analytical support, technical assistance, and relevant studies within their respective areas of competence, as may be requested by the working groups."
This compendium on Provisions on Standards and Conformity Assessment in Trade and Integration Arrangements of the Western Hemisphere was prepared by the Trade Unit of the OAS for the FTAA Working Group on Standards and Technical Barriers to Trade. It sets out in a comparable format information on provisions relating to standards contained in six subregional trade arrangements and in nine free trade agreements. The provisions of these trade and integration arrangements are examined with respect to those on standards, technical regulations, and conformity assessment procedures set out in the WTO Agreement on Technical Barriers to Trade. Additionally, the compendium contains information on the administrative structures of the various standards committees and bodies set up under the integration arrangements, and on their recent activities. It complements an earlier publication by the OAS Trade Unit entitled National Practices on Standards, Technical Regulations and Conformity Assessment in the Western Hemisphere (May 1997). Both documents are important not only for the information they contain but also because they represent steps towards bringing about greater transparency in a highly complex but critical area to the realization of trade promotion and liberalization in the Western Hemisphere. As such, they complement the work at the multilateral level within the World Trade Organization through its Committee on Technical Barriers to Trade. The compendium also aims to help advance the dialogue on trade liberalization and economic integration among participants in the FTAA process. It is hoped that this effort may contribute to the success of the FTAA, as such an ambitious endeavor requires, inter alia, the availability of comprehensive and well organized information.
It is important to acknowledge the people who have made this particular publication possible. The members of the FTAA Working Group on Standards and Technical Barriers to Trade have supplied the information included in the Compendium. The coordinator of the FTAA Working Group from Canada’s Department of Foreign Affairs and International Trade - Earl Weybrecht - has been instrumental in guiding the process and in attempting to make the information in the document accurate and up-to-date. Within the OAS Trade Unit, Sherry M. Stephenson has been the liaison between the OAS and the FTAA Working Group on Standards and Technical Barriers to Trade, and has assumed direct responsibility for the preparation of the compendium. She has been assisted by Luke Ney and Ivonne Zuniga of the OAS Trade Unit.
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This study responds to the mandate contained in the Work Programme of the FTAA Working Group on Standards and Technical Barriers to Trade for 1996-97, approved by Western Hemisphere Trade Ministers at their meeting in Cartagena, Colombia (March 1996), to "examine the provisions of, and harmonization activities under existing subregional trading arrangements relating to standards and technical barriers to trade, with a view to complementing the existing ‘Inventory of National Practices on Standards, Technical Regulations and Conformity Assessment in the Western Hemisphere.’ "
In fulfilling this mandate the following trade and integration arrangements have been examined: Andean Community, CACM, CARICOM, Group of 3, MERCOSUR, NAFTA, as well as the bilateral free trade agreements between members of the Western Hemisphere, namely: Chile and Mexico, Chile and Bolivia, Chile and Venezuela, Chile and Colombia, Chile and Ecuador, Mexico and Bolivia, Mexico and Costa Rica. The recent agreements between Chile and MERCOSUR and Bolivia and MERCOSUR were also examined. Only the legal texts of the respective treaties have been used for the information in Parts I and II, while supplemental documentation (of a non-legal nature) was used for the information in Part III. This information was obtained through country submissions and through other relevant sources.
It should be mentioned as well that ALADI Member countries have concluded a framework agreement for the promotion of trade through the overcoming of technical barriers to trade, which as signed on December 1997. This framework agreement covers technical regulations, conformity assessment procedures, technical assistance and diffusion of information. The Agreement is open for signature to ALADI members and other Latin American and Caribbean countries.
In Part I the multilateral rules and disciplines on standards, technical regulations and conformity assessment procedures set out in the World Trade Organization Agreement on Technical Barriers to Trade (WTO TBT Agreement) are used as a reference for the provisions reviewed on standards, technical regulations and conformity assessment procedures in the trade and integration arrangements listed above. The provisions of each arrangement are examined with respect to the following areas: definitions; policy objectives; relationship to the WTO TBT Agreement; use of international standards; administrative structures; cooperation on standards; transparency requirements; and dispute settlement. In Part II the provisions on standards, technical regulations and conformity assessment procedures in the bilateral free trade arrangements are examined, in relation to the same areas set out in Part I. Lastly, in Part III, recent standards-related activity within subregion trade and integration agreements are reviewed.
In the presentation of the compendium the space allotted to each trade and integration arrangement may vary from section to section. The uneven distribution of space is not meant to imply a different status of one arrangement vis-à-vis another, but merely reflects the amount of text in a particular treaty related to a specific topic.
With respect to provisions on standards and technical barriers to trade the trade and integration arrangements contain the following:
NAFTA, Group of 3 and the Andean Community contain detailed provisions on all of the topics examined. Within the MERCOSUR, working groups mandated by the principal text have been established which are addressing standards issues directly, and these bodies have carried out considerable work. Among the bilateral free trade agreements only Mexico-Bolivia and Mexico-Costa Rica contain detailed provisions on standards.
Definitions of a standard, technical regulation and conformity assessment procedures, among others, are set out in NAFTA, the Andean Community, the Group of 3, and the two bilateral free trade agreements by Mexico with Bolivia and Costa Rica. These definitions resemble closely those contained in the WTO TBT Agreement. Only NAFTA and the Group of 3 define a "standards-related measure".
(3) Policy Objectives for Standards-Related Measures
Nearly all of the trade and integration arrangements encourage and/or mandate their members to coordinate their standards-related activities in some form, whether this be through harmonization of standards-related measures or through promotion of compatibility of the same. Those integration arrangements which are customs unions set out harmonization as their overriding policy objective, while those integration arrangements which are free trade areas emphasize an approach based on the promotion of "compatibility" in standards-related measures.
Under Decision 376 the Andean Community is mandated to gradually harmonize existing national standards. MERCOSUR declares a commitment to also "harmonize their legislation in the relevant areas" although the treaty does not specify standards in particular. However, NAFTA mandates its members to "make compatible their respective standards-related measures" to the greatest extent possible, and to "promote compatibility of a specific standard or conformity assessment procedure" maintained in each member’s territory with those maintained in the other members’ territories. The Group of 3, Mexico-Bolivia and Mexico-Costa Rica likewise encourage their members to "promote the compatibility of specific standards-related measures". Chile-Colombia and Chile-Ecuador also encourage their members to follow the principle of compatibility, when possible, of the signatory countries’ measures on standardization. In its more recent free trade agreement with MERCOSUR, Chile and the other Member Parties "agreed to the relevance of establishing a coordinated agenda and criteria for the compatibility of standards".
Regarding technical regulations, NAFTA and the Group of 3, and also Mexico-Bolivia and Mexico-Costa Rica, direct each importing party to treat technical regulations of exporting parties as equivalent. The Andean Community charges its members to harmonize technical regulations in Decision 376. In the area of conformity assessment procedures, NAFTA, the Group of 3 and the bilateral free trade agreements signed by Mexico with Bolivia and Costa Rica declare that "each party shall, whenever possible, accept the results of a conformity assessment procedures conducted in the territory of another party". The provisions of these treaties also specifically encourage the recognition, approval or licensing of conformity assessment bodies in the territory of other parties and go into extensive detail on the procedures to be followed with respect to conformity assessment procedures, with the objective of ensuring transparency in this area. Those arrangements, as well as the agreements between Chile and MERCOSUR, Chile and Colombia and Chile and Ecuador, specifically encourage their members to negotiate mutual recognition agreements.
Decision 376 of the Andean Community directs the national accreditation bodies of its members to accredit all qualifying laboratories and ensure that those bodies comply with the procedures established by the Committee in charge of overseeing Decision 376. Other provisions clarify the role and expected reliability of testing procedures, and admonish members to use internationally recognized certification systems as the basis for these.
(4) Relationship of Subregional Arrangements examined to the WTO TBT Agreement
The Andean Community, MERCOSUR, the Group of 3 and NAFTA, and the bilateral free trade agreements signed by Mexico with Bolivia and Costa Rica guarantee MFN treatment and national treatment with regard to standards, technical regulations and conformity assessment procedures. The Group of 3, NAFTA, Mexico-Bolivia and Mexico-Costa Rica treaties make specific reference to the Parties’ obligations under the WTO TBT Agreement. Enquiry points are cited as specific obligations under NAFTA, the Group of 3, the Andean Community, Mexico-Bolivia and Mexico-Costa Rica.
The WTO TBT Agreement includes a "Code of Goods Practice for the Preparation, Adoption and Application of Standards" in the Annex to the Agreement, whose implementation is obligatory for all central governmental bodies. None of the arrangements examined contain a similar code or provisions.
(5) Use of International Standards
Provisions concerning the use of international standards are contained in NAFTA, the Group of 3, the Andean Community and the bilateral free trade arrangements between Mexico-Bolivia and Mexico-Costa Rica, but none of these go into as much detail as the text of the WTO TBT Agreement.
(6) Administrative Structures Within Subregional Arrangements
Most of the arrangements examined -- the Andean Community, CARICOM, the Group of 3, MERCOSUR, NAFTA, Mexico-Bolivia and Mexico-Costa Rica -- create some form of committee or working group to carry out activity on standards or standards-related measures. The recent activities of these bodies within each integration arrangement are elaborated further in Part III of the Compendium, to the extent that information was available. NAFTA, the Group of 3, Mexico-Bolivia and Mexico-Costa Rica outline the scope of activity of the administrative body within the treaty itself while the Andean Community sets out the functions of its standards committee in Decision 376. One of the ten working groups set up in Annex V of the MERCOSUR treaty is that on ‘technical regulations’.
(7) Cooperation among Members of Trade and Integration Arrangements
Cooperation, which includes exchanges of personnel and/or training, is explicitly encouraged between members in the majority of trade and integration arrangements, as is technical assistance. However, only the Andean Community, the Group of 3, and NAFTA address cooperation in the area of metrology.
(8) Transparency Requirements
The Andean Community, the Group of 3, NAFTA, Mexico-Bolivia and Mexico-Costa Rica go into great detail to outline procedures related to notification of proposed changes in standards, technical regulations and conformity assessment procedures, which include guidelines for allowing input and comment by other member countries as well as recommended time lines for each step of the procedure involved in developing new standards and/or modifying existing ones.
(9) Dispute Settlement
Regarding dispute settlement, only those provisions of the treaties specifically related to standards-related dispute resolution have been referenced in detail. Most provisions on standards-related dispute resolution include the formation of a committee to oversee consultations between the parties involved, with additional reference to the main dispute resolution procedures of the treaty. NAFTA is the only arrangement which mentions the relationship between its dispute resolution process and that of the WTO, specifying that a dispute may be settled in either forum.
Part III elaborates the recent activities of the committees or working groups created under the trade and integration arrangements examined to carry out projects on standards or standards-related measures. Information was not available on activities under the bilateral free trade agreements. The following summarizes this section.
(1) Administrative Structures
NAFTA has an overall Committee on Standards-Related Measures and eight (8) specific sectoral subcommittees on the following areas: land transportation, telecommunications, automotive and labeling of textile and apparel goods. Other standards-related groups and activities include pesticides, food labeling, a trilateral standardization forum, and a consultative committee on telecommunications. The Group of 3 also has an overall committee on standards-related measures and will establish a subcommittee for standards-related health measures.
Within MERCOSUR there is a Working Group for technical standards, and the Standardization Committee (CMN), which is MERCOSUR’s standardization authority and is currently composed of standardization bodies of the four countries and Chile. The CMN sets up sectoral standardization committees to carry its work in specific areas of interest. There are at present sixteen (18) sectoral committees at work: electrical power; steel; electronics and telecommunications; toys; cement and concrete; machinery and mechanical equipment; automobiles; tires, rings and valves; plastic for civil construction; information technology and industrial automation; dentistry, medicine, hospital care; paper and cellulose; quality; welding; furniture; environment; accessibility; graphics technology.
The Andean Community has an Andean Standardization Committee which operates in coordination with the standardization bodies of the five member Andean countries. The Board of the Cartagena Agreement functions as the technical secretary of the Committee and has created ad-hoc committees comprised by experts and governmental authorities for standards-related aspects of security, health, consumer protection, the environment and national defense.
The standards committees of NAFTA, Group of 3, the Andean Community, MERCOSUR and CARICOM all use international standards as a basis for their subregional standards-related measures. The Group of 3 is considering the establishment of an office for standards coordination. NAFTA’s subcommittees publish regularly the results of their meetings and decisions but this is not the case of standards-related committees in the other trade and integration arrangements.
(2) Cooperation among Standardizing Bodies under the various Trade and Integration Arrangements
Cooperation among standardizing bodies under the various trade and integration arrangements is carried out through the organization of the different committees described before. There has been no consolidation of WTO obligations in the form of Enquiry Points or information centers among the members of these trade and integration arrangements. However, the Andean System is creating a Center of Information and Registration for all standards-related activities.
Technical cooperation and exchanges of personnel as well as training are encouraged among members of NAFTA, the Andean Community, the Group of 3, CARICOM and the Mexico-Bolivia and Mexico-Costa Rica agreements. Several NAFTA subcommittees and technical working groups facilitate technical cooperation on an "as needed basis", while there are internship programs within the Andean Community that permit training of technical personnel in the different areas of standardization, accreditation, certification and metrology.
Continue to Part I: PROVISIONS ON STANDARDS AND TECHNICAL BARRIERS TO TRADE IN SUBREGIONAL TRADE AND INTEGRATION ARRANGEMENTS
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