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Standards

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. Standards and technical regulations, whether for products, labor, 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'. In practice, however, standards and technical regulations may be used strategically to enhance the competitive position of countries or individual firms.

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 multi-faceted, 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.

However, rather than constituting barriers to trade, 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.

In recent years, the World Bank has begun to increase its involvement in this field, through an expanding portfolio of projects containing components which provide technical assistance and other capacity-building support. Some of this is in the context of broader export promotion programs, while other investments in standards-related capacities are taking place within agricultural services, diversification, and marketing support programs. In addition, the World Bank has a program of analytical research and policy analysis which aims to develop a more detailed understanding of the economic, institutional and policy aspects of standards and trade, including the strategic and policy options available to governments and the private sector in developing countries.

As a result of the growing demand from client countries for Bank assistance in relation to standards, this website provides information on Bank activities in this field. Information and pertinent links on complementary research programs on standards is also provided. This is expanded by links to operational work of other development agencies (including both bilateral and multilateral agencies, USAID, European Union, UNIDO and FAO), and general links to various other agencies and private standards initiatives.

 

Last updated on Sep 19, 2008




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