MEKONG

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Significance ofTesting and Conformity Assessment
in Global Trade Challenges for Research
Technology Organizations (RTOs)
UNIDOTrade Capacity Building Initiative
Dr. Lalith Goonatilake Senior Industrial
Development Officer Industrial Promotion
Technology Branch lgoonatilake_at_unido.org
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World trade 1970 99 (trillion US - constant
1995)
TRADE CAPACITY BUILDING - TBT
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2000
1970
1975
1980
1985
1990
1995
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World trade 1970 99 (trillion US - constant
1995)
TRADE CAPACITY BUILDING - TBT
TRADE CAPACITY BUILDING
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2000
1970
1975
1980
1985
1990
1995
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Increase in Per Capita Export Earnings between
1990 and 1999
TRADE CAPACITY BUILDING - TBT
TRADE CAPACITY BUILDING
BUT THE GAINS FROM TRADE ARE DISTRIBUTED UNEVENLY
0
500
1000
1500
2000
Source Rigged Rules and Double Standards (OXFAM
2002)
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A CONCERTED INTER-AGENCY STRATEGY FACILITATES
MARKET ACCESS
STANDARDS CONFORMITY ASSESSMNT
INFRASTRUCTURE (TBT, SPS) UNIDO
CUSTOMS PROCEDURES TRANSPORTATION DOCUMENTATION
UNCTAD, IMO
SUPPLY DEVELOPMENT (Capacity
Competitiveness) UNIDO
Compete
Conform
Connect
INVESTMENT FACILITATION FINANCIAL
FLOWS UNCTAD UNIDO
EXPORT PROMOTION ( Market Opportunities) ITC(
AGOA EBA)
INTERNATIONAL AGREEMENTS RULES FOR TRADE WTO
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TRADE CAPACITY BUILDING- TBT
P R OD U C T S
M A R K E T S
Products to Market
Connect to the Market
Develop Competitive Manufacturing Capability
Prove Conformity with Market Requirements
Compete
Conform
Connect
.by upgrading supply capacities and standards
infrastructures
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TRADE CAPACITY BUILDING - TBT
TRADE CAPACITY BUILDING
PRE CONDITIONS FOR MARKET ACCESS The three Cs

• Enhanced COMPETITIVENESS of Supply Capacity
• Countries must have marketable products to sell
• Recognized CONFORMITY with standards
• Products must meet market/client requirements
• Efficient CONNECTIVITY to Markets
• Rules for trade,customs must be harmonized

LDCs have neither the surplus of capacity of
exportable products nor the production capacity
to take immediate advantage of new trade
opportunities Kofi Annan- UN SG Referring to
the EU EBA initiative (Financial Times 5 Mar
2001)
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TRADE CAPACITY BUILDING - TBT
TRADE CAPACITY BUILDING
So far focus on customs and tariffs
More is needed .. 1) Development of competitive
supply capacities

• Policy and Institutional framework
• Investment Promotion
• Technology Transfer
• SME Development
• Sectoral Technical Support
• Quality, Standards, Metrology Development
• Cleaner Production

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More is needed .. 2) Proof of conformity with
market requirements !
TRADE CAPACITY BUILDING - TBT
TRADE CAPACITY BUILDING
So far focus on customs and tariffs

• Standards Compliance
• Metrology Compliance (Traceability of
  measurements)
• Product Specification Compliance
• Quality Compliance
• Environment standard compliance
• Food Safety Compliance
• Product Safety Compliance

Credible Evidence of Conformity- Mutual
Recognition
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TRADE CAPACITY BUILDING
TRADE CAPACITY BUILDING - TBT
TBT /SPS Agreement (Jan 1995)
TBT Agreement on Technical Barriers to
Trade SPS Agreement on Application of Sanitary
Phytosanitary Measures

• Recognises importance of standards and conformity
  assessment for Trade
• Encourages the development of standards
  conformity assessment systems
• However does not want standards/technical
  regulations create obstacles to trade
• Recognises country rights to ensure
• Quality of imports/exports, Product Safety
• Protection of human, animal, plant life, health,
  environment
• Aims to prevent standards/technical regulations
  creating obstacles to trade
• Only legitimate objectives- national security,
  prevent deceptive practices
• -protection of human, animal health, plant life,
  safety, environment
• Recognises special problems of developing
  countries in this area
• Members shall, if requested ..grant assistance to
  developing country members

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Immediate Potential in Agro-Food Areabut have to
comply with market demands
TRADE CAPACITY BUILDING - TBT

• AFLATOXINS
• Found in African cereals, dried fruits and nuts
  causes liver cancer .
• Treated as carcinogenic food contaminants.
• EU regulation would reduce
• 1.4 deaths per billion, annually
• Impact of the standard on Africa
• 64 export reduction
• US 670 mn a year
• Source A Race to the Top? A case study of Food
  Safety Standards African exports, Otsuki,
  Sewadeh Wilson, World Bank 26 Feb 2001

11/17/2009
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Standards Vital for Trade
TRADE CAPACITY BUILDING - TBT

• Even a traditional product like fish sauce,
• now has to comply with standards

11/17/2009
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TRADE CAPACITY BUILDING - TBT
INTERNATIONAL STANDARDS

• Contribute to making the development,
  manufacturing and supply of products and services
  more efficient, safer, cleaner.
• Make trade between countries easier and fairer
• Mostly made by ISO and IEC, CAC (Codex), IPPC
  IOE
• Annually approx. 1000 new standards issued
• (approx 45,000 pages)
• Developing countries Standard TAKERS and not
  MAKERS
• Greater Developing Country participation in
  standard setting
• Good Manufacturing Practices becoming Standards
  
• (ISO 9000, ISO14000, HACCP, SA 8000)
• Threat standards can be used as a Barrier to
  Trade
• Require a functioning NATIONAL STANDARDS BODY
• WTO Enquiry Points set up Standards
  Information

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TRADE CAPACITY BUILDING - TBT
1996
1997
1998
2000
1999
INTERNTIONAL STANDARDS ORGANISATION ANNUAL
PRODUCTION OF ISO STANDARDS
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Management Systems- Becoming Standards
TRADE CAPACITY BUILDING - TBT
MARKET COMPLIANCE- Standards, Metrology, Testing,
Conformity

• Quality Management System (ISO 9000)
• ISO 9000 does not signify specific quality level
• Can apply for company or opt for THIRD Party
• Third party certification facilitate trade
• Used as a advertising/marketing slogan
• Environment Management System (ISO 14000)
• Minimum compliance to environment laws and
  commitment to Continuous improvement
• Important for global trade/ Environment protection

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Management Systems- Becoming Standards
TRADE CAPACITY BUILDING - TBT
MARKET COMPLIANCE- Standards, Metrology, Testing,
Conformity

• Hazard Analysis Critical Control Point HACCP
• A food safety standard
• Becoming mandatory for USA (Also possibly EU)
• New ISO 22000 Food Safety Management
• Expected Mid 2005
• Social Accountability Standard SA 8000.
• Avoid Child labour, exploitation
• Union rights, Collective bargaining etc.
  (controversy)
• ISO to develop a new SA standard _June 2004
• Occupational safety standards (OHAS)

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Management Systems- Becoming Standards
TRADE CAPACITY BUILDING - TBT
MARKET COMPLIANCE- Standards, Metrology, Testing,
Conformity

• Traceability EU Directive EC 178/2002 2005
• All Edible products, despite of their origin,
  will have to be accompanied by detailed
  information on source, production system and
  processing procedures so as to make consumers,
  sanitary and inspection institutions able to
  follow back and forward the distribution stream
  of the product.
• A new Challenge UNIDO Egypt First project
• Terrorism related Safety (Shipping)
• Bio terrorism,

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TRADE CAPACITY BUILDING - TBT
Metrology (Science of Measurement) - A
requirement for
Scientific Research Accurate calibration of
scientific instruments
Food Safety Calibrated thermometers, balances,
etc. a requirement
Laboratory Accreditation Calibration status of
test equipment- a requirement under ISO 17025
ISO 9000, ISO 14000 certification Calibration
status of equipment a clause under ISO 9000, ISO
14000
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TRADE CAPACITY BUILDING - TBT
Calibration- the process of verifying the
accuracy of an instrument or material measure in
comparison with the international measurement
system.
TRACEABILITY OF MEASUREMENTS
Examples The adjustment of a weighing balance
in relation to the kilogram and its multiples
or sub multiples The verification of a
micrometer/ meter ruler in relation to the
international meter

• METROLOGY CALIBRATION ESSENTIAL FOR
• Science Technology development
• Basic Research
• Precision manufacture
• Laboratory accreditation

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HIERARCHY OF MEASUREMENT STANDARDS
TRADE CAPACITY BUILDING - TBT
Bureau International des Poids et Mesures
The International Organization of Legal Metrology
(OIML)
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LABORATORY ACCREDITATION
TRADE CAPACITY BUILDING - TBT

• ENSURING CREDIBILITY OF TESTING
• ISO 17025 Standard
• Physical facilities
• Equipment
• Human resources
• Calibration
• Test methods and test validation
• Quality system
• Independent accreditation
• Recognition

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TRADE CAPACITY BUILDING - TBT
Mutual Recognition of Certificates/ Conformity
MULTILATERAL AGREEMENT ILAC
Country 1
Country 2
Accreditation Bodies
Accreditation Body A1
Accreditation Body A2
Laboratories
C2
C1
C3
C4
C5
C6
International Laboratory Accreditation
Co-operation Multilateral Agreement will offer
recognition among its members
E7
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• The WTO UNIDO agreement is a formal
  recognition that assisting developing countries
  to build capacities to produce exportable goods
  is an important part of trade-related technical
  assistance and capacity building Cancun,
  September 2003.
• The resulting technical cooperation programme
  involves focus on
• Supply Chain Constraints
• Lack of Conformity Capacity to Intl Standards
  and Technical Requirements
• Marginalization in the Multilateral Trading
  System
• Pilot countries involved are Armenia, Cambodia,
  Cuba, Egypt, Ghana, Kenya, Mauritania

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Cooperation to ensure that LDCs, developing
countries and economies in transition will be
able to reap the benefits of the world trading
system which is made freer and fairer based on
international standards.
The team work will focus on awareness creation
and competency building in the respective
countries. This will materialize through
workshops, seminars and training on standards
development.
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WTO/OECD Report on Trade-Related Technical
Assistance and Capacity Building (TRTA/CB) Box 3
Sri Lanka - Quality, Standardization and
Metrology Project UNIDO The Quality,
Standardization and Metrology (QSM) Project,
funded by Norway (US 1.8 million) and UNIDO (US
500,000), which aims to develop the metrology,
testing and ISO 14000 capacity in Sri Lanka.
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CHALLENGES for RTOs in Developing Countries

• Laboratory capacity mostly found in RTO
• RTOs set up as Government Institutions
• Supporting import substitution industrialisation
• Priority for research and not testing support
• Lack of commercial orientation
• Accreditation issues
• ILAC, APLAC, MRAs
• Limited Experience in setting up NABs
• Certified Reference Material
• Proficiency Testing schemes
• Potential for WAITRO-UNIDO Collaboration

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CONCLUSIONS

• TBT/ SPS Essential for global trade
• TBT - Challenge for developing countries
• Provide evidence of compliance
• Key infrastructure needs
• Standards development
• Metrology
• Testing
• Certification
• Conformity
• RTOs have a vital support role to play
• Potential for UNIDO-WAITRO collaboration

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Thank You