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Standards are the "lingua franca" of world trade. International Standards provide a common technical language for trade partners throughout the world and help remove unfair trade barriers, facilitating global trade.
The "Agreement on Technical Barriers to Trade", of World Trade Organisation (WTO) recommends adopting international standards in the interest of global free trade; as standards dismantle non-tariff barriers to trade, ensure trade between various countries and provide a basis for comparing products on the international trade market. "In today's age of globalisation, standardisation is a particularly good example of industry's self-organisation at the highest technical level", says Frank-Walter Steinmeier, German Federal Minister for Foreign Affairs.
In a globalized world international standards are the key that open doors to new markets where standardisation is a prerequisite for international co-operation. There is growing consensus world-wide that standards generate economic benefits and promote world-wide trade, encouraging rationalisation, quality assurance and environmental protection, as well as improving security and communication. Additionally, the researchers suggest that standards have a greater effect on economic growth than patents or licences.
Standardisation is a strategic instrument for economic success. For businesses active globally, International Standards are a major criteria for assessing the suitability of potential business partners and suppliers, and help ensure the compatibility and quality of products and services. Businesses that not only use standards but also actively participate in the standardisation process enjoy even greater economic success, as it is said "those who set the standard govern the market".
Being part of standardisation gives businesses the opportunity to successfully place their own technology on the market, gives them the advantage of knowing the needs of customers and operators, and provides insight into the technical developments of their competitors. When globally active businesses conclude agreements in growth markets, they want to be sure their partners all use the same standards. By becoming involved in standards work, businesses can gain a competitive lead through timely access to information and knowledge. They can use this to their own advantage, reducing the risks and costs involved in R & D as well as greatly reducing transaction costs.
One of the major criteria for economic success is the translation of innovations into marketable products and services. Standardisation plays an important role at the interface between research and marketing and serves as a knowledge base and catalyst for innovation; whereas, standardisation has a positive effect on the entire innovation process, from fundamental research to marketing of new products. Norms and standards are a source of knowledge for research and development, for they reflect the current state of technology as a result of the participation of numerous experts in the relevant fields.
Norms and standards can also promote the development of new technological fields: Standardised methods of testing and measurement further progress in R&D and facilitate co-operation between funding sources and research institutes. Standards help researchers in various ways: They lay down terminology in new technological areas, set quality and safety norms, and introduce the necessary standardised, compatible interfaces.
Reduction in cost is one significant payoff of the standards. By using standards, the business can access the knowledge base contained in standards, rationalise by using the information in standards to produce more for less and lower transaction costs, improve customer satisfaction. At the same time reduce liability risks by meeting quality and product safety requirements laid down in standards, use International Standards to enter the global market, and can generate greater demand and higher profits if standards are used to increase interface compatibility. Though participation in standards work entails initial costs and time investment, standardisation makes a large contribution to economic efficiency in the end. The businesses engaged in standardisation also have an opportunity to see their propriety technology prevail on the market. In addition, standards work offers a forum for observing technological developments on the market and among competitors.
Because customers and suppliers are also involved in the standardisation process, businesses can have timely access to their wants and needs. These strategic advantages can help a business save on the costs of adjusting to the market and of market entry. On demand side, if a supplier complies with a standard, purchasing is much easier in terms of testing and product acceptance and bringing in cost savings.
Standards' contribution towards safety is well recognised as standards increase safety in all walks of life, be indoors, on the road or during leisure time activities. Standards protect workers on the job in the factory, office, laboratory or construction site. New technologies can be placed on the market more rapidly because standards clarify fundamental issues of safety, health and environmental sustainability, as well as performance and reliability. This increases consumer confidence.
The aim of standards is to maximise the benefits of technological developments while minimising the risks involved. Standards help users be "on the safe side" legally as well. Globally standards are recommendations whose use is voluntary - they only become binding when their use is laid down in a contract, law or regulation. Standards can prevent legal disputes because they set out unambiguous specifications, helping manufacturer to stay on the safe side.
Standards contribute to sustainability by taking occupational health and safety and environmental protection into consideration: They offer experts tried and true solutions to technical questions of environmental protection, and facilitate regulation by providing uniform terminology, specifying substantive requirements, defining limit values, and laying down standardised methods of measurement.
Standards cover all aspects of air and water quality control, noise control and energy savings. The series of international standards on environmental management not only serves to ensure the environmental sustainability of industrial products and processes but also encourages environmental awareness among employees, thus helping businesses minimise the use of non-renewable resources, achieve legal stability, and meet customer demands. In our day-to-day use of a product we rely on the fact that it has the highest possible quality in terms of usage, health and environmental protection. Therefore, standards influence the public interest in many ways, for example by giving detail to safety targets- that could be specified in laws and regulations.
As a major step forward, social aspects of sustainable development are also being dealt with in international standardisation -the Corporate Social Responsibility (CSR) standards of ISO, the International Organisation for Standardisation. The key characteristics of this document are to provide guidance on the underlying principles of social responsibility, the core subjects and issues pertaining to social responsibility and on ways to integrate socially responsible behaviour into existing organisational strategies, systems, practices and processes. The targeted audience of this standard are all types of organisations in the private, public and non-profit sectors, whether large or small, and whether operating in developed or developing countries.
It is not out of context to mention that standards and tests go hand in hand and are key to the development of the global market. Standards give specifications or requirements for products, services, systems, processes and materials. Tests then verify that these standards can be met reliably over time. Once these standards are accepted broadly at an international level, they can further foster the development of a global market for the goods or services - a market built on consistent quality and consumer confidence.
Standards are a technical language that businesses the world over use to create goods, services and systems. Since businesses everywhere understand it, the goods and services they produce based on this language should have the same quality wherever they are made. Standards may come about to achieve a variety of objectives such as ensuring safety and performance, but their basic and essential nature is that by establishing certain parameters, they provide a common technological foundation for producing goods, services and systems anywhere.
[The author is presently working as Director WTO in Pakistan Standards & Quality Control Authority (PSQCA)]

Copyright Business Recorder, 2009

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