One of the consequences of globalisation is the growing competition between individual companies, locations and regions. Almost any place on earth could be considered as a possible production location; and companies market their products worldwide. But only those who can guarantee international quality standards and production conditions make attractive business partners.
International Standards, and their use in technical regulations on products, production methods and services play an important role in sustainable development and trade facilitation through the promotion of safety, quality and technical compatibility. Traditionally, each country has its own units of measure, quality standards and scales. The more international trade becomes, the more difficult it is to compare the price/performance ratio of products and services. Introducing and applying unified standards makes it possible to compare quality and price. This makes it easier to produce goods to the same quality standard in different countries, and ensures greater transparency for consumers.
In order to match the competition, many developing countries have to drastically change their economic processes. The benefits that are derived are significant. Standards and technical regulations, whether for products, labour, or for the environment, are applied to mitigate against health and environmental risks, to prevent deceptive practices, and to reduce transaction costs in business by providing common reference points for notions of quality, safety, authenticity, good practice, and sustainability. Standardization contributes to the basic infrastructure that underpins society including health and environment while promoting sustainability and good regulatory practice.
In practice, however, standards and technical regulations may be used strategically to enhance the competitive position of countries or individual firms. In recent decades, tariff and quota barriers to trade in many agricultural, food, and manufactured products have declined, enabling a range of developing countries to accelerate their economic growth through expanded exports. Yet, international trade is also governed by an increasing range and variety of product and process standards and technical regulations. Duplicative and discriminatory regulations and standards, however, can be an important factor driving trade transactions costs.
However, rather than constituting barriers to trade, harmonized international standards and regulations can support trade and export expansion. Some of the emerging public and private standards may serve as catalysts, further reducing the transaction costs in long-distance trade, providing both a stimulus and guide for investments in firm and supply chain modernization, and providing increased incentives for the adoption of better and safety farming and manufacturing practices. Under such a scenario, the process of standards compliance could contribute to new forms of competitive advantage and contribute to more sustainable and profitable trade over the longer term.
Only countries with an efficient infrastructure, in particular in the field of metrology and testing, can benefit from the increasing globalization of international relations by trade, division of labour, and investments in the production and tertiary sectors. Reliable measurements are a prerequisite for quality assurance, certification of product properties, environmental protection and the safe application of technology in all fields of everyday life.
Improving developing country capacities in metrology, standardization, testing, quality assurance, accreditation and certification (MSTQ) lie at the core of developing country ability to export promotion. In addition to their role in economic development, MSTQ capacities are fundamental to the strengthening of environmental, health and consumer protection.
Among policy-makers and private entities in developing countries there is growing concern about the proliferation and strengthening of standards and technical regulations and how this is impacting upon their competitiveness. This concern is complex, involving (1) the suspicion that important standards and technical regulations can and will be used as a trade protection measure and be applied in a discriminatory manner; (2) the contention that developing countries lack the administrative, technical and other capacities to comply with the emerging requirements, or that the costs incurred to attain compliance will undermine their comparative advantage; and (3) the proposition that such institutional weaknesses and rising compliance costs will serve to marginalize weaker economic players, including small countries, small enterprises, and small-scale farmers.