Monday, 14 August 2017

The Myth of Global Regulations - Technical Standards

One of the recurring memes of those who support an EFTA EEA option for Britain is that even though we are still obliged to adopt all the EU's single market regulations (the EEA acquis) these are primarily "global" regulations and the EU is merely a "redundant middleman".

The 1994 WTO Technical Barriers to Trade (TBT) Agreement is cited, especially Article 2.4,
2.4    Where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued, for instance because of fundamental climatic or geographical factors or fundamental technological problems.
Three organisations are identified by the WTO as central to international standards harmonisation, which are mirrored by three European Standardisation Organisations (ESOs) officially recognised by the EU Commission as a platform to develop European standards. These European organisations recognise the primacy of their international counter-parts and have committed to using international standards wherever possible:
It is claimed that WTO TBT Article 2.4 is "the redundancy notice for the EU's version of the Single Market", with EU law increasingly replaced by international standards - meaning that we can stay in the EU's single market but influence and control the  EU's single market regulations at a "global" level. This is a seductive argument (I fell for it for a while), but it does not stand up to scrutiny:

1) There is a big difference between voluntary standards and binfing regulations. Technical Regulations may be "based" on voluntary international standards and are implemented in national legislation (or for EU/EEA member states, EU legislation). It is national (or EU) legislation that makes regulations mandatory within the respective national (or EU/EEA) territory. There is no such thing as international or global regulations. The detailed implementation of national regulations also provides scope for gold-plating and regulatory barriers - even when the regulations are based on international standards.

2) European standards are not fully harmonised with international standards. The EU's 2016 standards bodies report suggests that while CENELEC standards are closely aligned with IEC standards (72% of CENELEC standards are identical to IEC standards with a further 22% of CENELEC regulations based on IEC standards), just 32% of CEN standards are identical to ISO standards. Moreover, the proportion of European standards "cited or intended for citation in the OJEU " indicate a lower level of international harmonisation within EU regulations: CENELEC - 58% identical to IEC, further 15% based on IEC, CEN - 24% identical to ISO).

3) The EEA acquis covers more than technical standards. As of 14th August 2017, Technical Regulations form 1905 of the 5500 EEA laws in force - about a third. The EEA'sVeterinary & Phyto-Sanitary measures are covered by the WTO Sanitary & Phyto-Sanitary (SPS) Agreement in the same way as Technical Standards are covered by the WTO TBT agreement. Some other areas of the EEA acquis (environment, energy, transport, health & safety etc.) may draw upon international conventions, but these are voluntary frameworks upon which the EU adds much detail . Areas such as Freedom of Movement are very much EU sourced laws.

4) Adopting a recognised international standard is not enough to guarantee market access - as the USA have found in trying to sell into the EU's single market.  The US Trade Department Report for 2016 highlights significant foreign barriers to U.S. exports - and is illuminating on various barriers the EU erects (pages 139-178). The opening pages cover how the EU creates technical barriers to trade - I've highlighted 2 main points regarding European standards (i.e. CEN, CENELEC & ETSI):
  • While EU regulations theoretically allow other (non-European) standards to be used to meet the essential requirements of EU regulations, in practice the process for demonstrating this is so arduous and unreliable that "U.S. producers often feel compelled to use the relevant EN" (i.e. CEN standard) "...even if the U.S. products are produced according to relevant international standards providing similar or even higher safety levels."
  • The EU also promotes adoption of European standards in third countries, often requiring withdrawl of existing standards as a condition for assistance, affiliation or trade - providing a commercial advantage to EU manufacturers. "The withdrawn standards can be international standards that U.S. producers use, which may be of equal or superior quality to the European regional standards that replaced them. U.S. producers thus must choose between the cost of redesigning or reconfiguring the product or exiting the market.
Britain is currently 100% harmonised with EU technical regulations so will not suddenly face technical barriers experienced by US producers.  Continued use of CEN, CENELEC and ETSI standards and affixing the CE mark will provide "presumption of conformity" for UK exporters under EU legislation (the route taken by US producers) .

Britain is also likely to stay a member of the three ESO's (CEN, CENELEC & ETSI). This may require Britain to adopt at least associate membership of EFTA, but EFTA states get a voice and vote on these organisations and consensus is sought for all decisions. Even outside the Single Market, Britain can still influence European standards. 

The downside of membership of these ESO's is the requirement to adopt European standards as national standards and prohibition from taking individual initiative on standards. In the longer term, Britain may wish to move away from being limited to purely European standards. Recognising international standards that meet or exceed essential objectives, will remove barriers to trade with third countries (e.g. US). This provides for a more open domestic market and the possibility for some British producers to focus on domestic and third country markets over EU markets.

It is clear that the EU's technical regulations are not simply a "rubber-stamp" of international standards. If Britain stays in the EEA it will remain shackled and subservient to the EU's particular regulations and moreover will contribute to exporting the EU's regulations via any third country trade agreements - we will be passive agents for the expansion of the EU's regulatory empire. Alternatively we can choose to be open to wider international standards, removing technical barriers and expand trade globally. The idea that we would be simply following "global" regulations via the EEA is a myth.


  1. Hello Paul,
    If I may attract your attention to a slight error in the numbers: for IEC: 71% of European standards are identical to IEC International Standards and a further 7% are based on IEC Standards. This means that more than 2/3s of European Standards are aligned with International Standards. We have also signed the Frankfurt Agreement with CENELEC which aims to increase harmonization at an even higher level. This is important because while there are historic differences that influence electrical devices, there is also increased harmonization globally. BSI in a recent media release has underlined that it will continue to give preference to International Standards, including those of the IEC. Importantly, it seems to me that there is a bit of an amalgamation between standards and regulation... they are a very different animal. So effectively: the idea of following "global" regulations via the EEA is nonsense...there simply are no global regulations.

  2. Thanks for correction. I'm not sure how I managed to mis-read the numbers from CENELEC report.

    While CENELEC & IEC are in pretty close alignment, CEN & ISO are not and it is the EU's insistence on CEN standards - even when equal or superior international standards exists that causes the problem with international trade - as per the US Trade Report.

    You are also right to say that there is big difference between voluntary international standards and binding regulations which may be based upon international standards - hence there are no international regulations - a point I was trying (perhaps failing) to make - I've tweaked the text slightly to hopefully make this clearer.

  3. The numbers I quoted (CENELEC 58% identical to, 15% based on IEC. CEN 24% identical to ISO) is the figures relating to CEN/CENELEC standards "cited or intended for citation in the OJEU" - in other words a measure of how aligned EU regulations are with ISO/IEC standards. The higher figures are a measure of how aligned CEN/CENELEC standards are with ISO/IEC standards, independent of citation in OJEU or incorporation into EU regulations.