MATIC, by Jean R. AbiNader (Washington, DC, Jan. 31, 2013) — The US-Middle East Free Trade Coalition at the National Foreign Trade Council (NFTC) met today with representatives from USTR, Commerce, and the State Department, who are gathering ideas and support for a MENA spring conference on product standards. To be held in the Gulf, the goal of the conference is to promote the adoption of US standards. Since the last effort in 2009, there have been many changes to America’s trade relations in the region.
Product standards have a clear impact on US trade policy. Think of it this way: when abroad, one of your first concerns is adaptors for your electronics – Apple or PC products that don’t work if the plugs don’t fit. That’s a simple example of how non-US standards affect our ability to sell and use US-made products overseas. From electrical circuits and the length of cords on appliances, to packaging and labeling for consumer products, and the contents of pharmaceuticals and cosmetics, virtually all US exports face challenges when they do not conform to standards used in the local markets.
In the late 80s, the private sector worked with Congress to mandate a full time standards professional residing in Saudi Arabia at a shared cost with the government. The body that oversees US standards, the National Institute for Standards and Technology (NIST), was less than thrilled with this legislation, and the program was eventually transferred to Commerce. Now it seems that this specialist function is but one of many assigned to economic counselors in US embassies, even though they lack the training and networks that were critical to the success of experts assigned through NIST.
This is very important today because US products face difficult entry barriers in overseas markets that use European or Chinese technical specifications. Another issue is that most MENA countries do not have a firm grasp of the notion of “voluntary” compliance, which is the US model. In America, specialized industry groups such as Underwriters Laboratory (UL) develop standards that are then adopted industry-wide, and companies “voluntarily” conform to those standards. MENA standards bodies, as a result of their bureaucratic culture, prefer to have “mandatory standards,” so no discretion is possible. But the US system also features regulatory agencies to make sure that there is compliance with standards and that the standards are kept up to date and reflect market demands.
These differing approaches make promoting US standards more difficult because most MENA countries don’t yet have a Consumer Products Safety Commission or the American Society for Testing and Materials (ASTM) and have more pressing regulatory issues such as the environment and energy.
Morocco has adopted US standards for construction machinery, electrical safety, and toys. However, as with other MENA countries, the government does not formally advise the US when standards are being developed. It’s only when new standards are announced that public comment is welcomed…then it’s too late. So why doesn’t the US government have standards experts in key countries, particularly those with Free Trade Agreements, on a full time basis to work with their colleagues on developing friendly standards? The US Government representatives at this week’s meeting did not see this happening, even if the private sector once again paid for the person.
The Gulf Standards Organization (GSO), which represents the GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE) will be co-hosting the conference with the USG. The GSO has strong ties with the MENA standards organizations and is seeking participation from the Arab countries. But more needs to be done to bring Morocco and the other non-oil producers closer to US markets. North Africa cannot be treated as an afterthought of US trade promotion, especially in the case of Morocco, which has an FTA.
The US can do a lot to ensure that follow-up mechanisms are in place with or without the episodic conference. For example, at the start of the US-Morocco FTA, capacity building technical assistance was provided to give Morocco experience in developing best practices for regulatory agencies. This can be replicated and expanded. The program “The Standards Alliance,” which brings together WTO, USAID, and local regulatory agencies, can be better funded and more proactive in supporting proposals from North African countries. And the existing FTA can become a vehicle for enlarging the scope of US-Morocco trade by amending the current rules of origin so that a larger array of products from the Maghreb can enter American markets duty free.
If the US wants to work for a stronger and deeper commercial footprint in north, west, and central Africa, than it needs to promote mechanisms that facilitate and revise or replace those that inhibit trade. Reinstituting regional standards specialists is a big step forward. And a diligent and long-term effort to harmonize product standards is another key ingredient in helping US companies successfully penetrate these markets.