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July/August 2009
ProVocative

Standards and U.S. Exports to the European Union

An Interview with Louis Santamaria

A U.S. Department of Commerce staff member since 1986, Louis Santamaria currently serves as the U.S. standards attaché at the U.S. Mission to the European Union in Brussels, Belgium. Here Santamaria talks about his work and that of the U.S. Mission in helping U.S. businesses export goods to the EU market.

How would you describe the purpose of the U.S. Department of Commerce standards attaché program? What are the current goals of the program?

The standards attaché program is in the U.S. Commercial Service of the U.S. Department of Commerce’s International Trade Administration. Its role, with the support of the standards attaché program and myriad DOC standards-related resources, is to help U.S. businesses export successfully to their targeted markets, which in the European Union involves 500 million consumers in the 27 EU member states. The Commercial Service at the U.S. Mission to the EU is uniquely positioned to support U.S. companies’ efforts to meet EU market challenges and seize its opportunities, particularly as its member states harmonize regulations and increase economic integration.

In March 2003, the Secretary of Commerce launched the U.S. Department of Commerce’s Standards Initiative at the urging of industry associations concerned about the increasing use of both voluntary and mandatory standards as technical barriers to trade and to strengthen U.S. competitiveness by enhancing the government agency’s involvement in standards activities. The DOC initiative comprised a plan to expand current activities and to develop a framework addressing the relationship between foreign standards and the international competitiveness of U.S. companies. A significant point in the plan was strengthening the standards attaché program.

The program underscores the importance of standards-related issues in trade. Standards-related commercial work matters greatly to our customers. One example is our efforts with industry, specifically the ATSC (Advanced Television Systems Committee) Forum to promote the use of the U.S. HDTV (high definition television) standard in various countries. In addition, the U.S. promotes open and transparent standards development processes globally to ensure that U.S. companies can provide input and expertise, or they may find themselves shut out of lucrative markets or with a greatly reduced market share. In addition, countries may use national standards to effectively block imports by making them mandatory. Dealing with these nontariff or technical barriers to trade is a key aspect of the Commercial Service’s standards work.

Our work on standards and conformity assessment is important to the success of many U.S. exporters in an increasing number of countries throughout the world. This is particularly true of our core clients, small- and medium-sized companies, who may not be successful entering international markets without our support in this area.

One example of our current European focus is the Europe Regional Standards/Market Access and Compliance Program. The ERS/MACP, which includes Commercial Service posts in 38 countries, focuses on market access and compliance aspects of standards, conformity assessment and product certification. The goal is to provide “early warning” for U.S. companies in European markets so that they can help influence EU/European Commission decisions. This key program will ultimately allow us to better serve our customers and expand U.S. export opportunities. ASTM International participates in and supports the ERS/MACP, as do International Trade Administration offices, the National Institute of Standards and Technology, and certain private sector entities.

ASTM International has 1,500 European members, and committee meetings have recently been held in Europe, including those in England, Germany and Italy, with additional planned. What impact do you think these meetings and related outreach activities by ASTM have on awareness and use of ASTM standards in Europe?

In principle, ASTM’s more high profile presence outside the United States, with meetings and outreach activities in Europe and elsewhere internationally, undoubtedly will help to increase awareness of ASTM by a broader range of audiences. This in itself should yield positive results for ASTM.

One possible impact is that ASTM standards may be increasingly used in the nonregulatory context. In addition, these outreach and awareness building educational activities may help to clear the conception that only Geneva-based organizations develop internationally relevant standards.

How would you describe the European approach to conformity assessment and use of the CE mark? How does that help or hinder non-European business access to European markets?

In short, the European approach is "top-down" while the U.S. approach is "bottom-up."

Under the EU’s New Approach to technical harmonization and standards, which provides for referencing standards to define a product’s technical characteristics, U.S. manufacturers must consider, prior to exporting, how to demonstrate that their products meet New Approach directives. Several conformity assessment options may be available depending on the product; requirements are specified in the applicable directive, and use of European regional standards is part of the process. For most exported products, compliance is visibly demonstrated by the use of CE marking. Bearing in mind that testing and certification for the U.S. market is not enough to export to the EU, manufacturers need to start from scratch to determine how to comply with EU requirements.

Since legislation harmonizes mandatory product safety requirements throughout the EU, generally a manufacturer only needs to go through the process once to be able to export to all 27 EU member states. Thus, the use of the CE mark allows access to all member states; in that sense it is good. CE marking may be burdensome if the directive requires the use of a notified body (a body meeting the relevant requirements that has been designated to carry out conformity assessment according to a directive). If it does not, businesses have more flexibility.

How have regulations and directives like REACH, RoHS, WEEE and EuP affected the businesses you work with? What sort of assistance do people request? How do standards help businesses comply with such regulations?

In general, U.S. businesses wishing to export to the EU are greatly affected by these and other regulations and directives, and a significant number of U.S. companies request assistance from the Commercial Service to learn about their requirements. That is where we come into the picture: the standards team and the other specialists at U.S. Mission to the EU, and frequently other DOC standards resources, offer guidance and information on the road to regulatory compliance. (See sidebar, “Resources about Standards at the U.S. Department of Commerce.”)

EU rules on Waste Electrical and Electronic Equipment, while not requiring specific customs paperwork, may entail financial obligations for U.S. exporters. The rules require exporters to register the products with a national WEEE authority or arrange for this registration through a local partner. Similarly, related rules for the Restriction of Hazardous Substances in Electrical and Electronic Equipment (RoHS) do not entail customs paperwork. However, U.S. exporters may be asked by a European RoHS enforcement authority or by a customer to provide evidence of due diligence in compliance with substance bans on a case-by-case basis.

The REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) regulation is a major chemicals policy that became law in June 2007. The new policy affects virtually every industrial sector. Since then, REACH regulation has required chemicals produced in or imported into the EU in volumes above 1 ton per year per to be registered with a central European Chemicals Agency, along with information on their properties, use and safe handling. Chemicals preregistered before Dec. 1, 2008, have benefited from later registration deadlines, variously from three to 11 years depending on the substance volume and potentially hazardous properties. U.S. companies without a European presence cannot register directly and must have chemicals registered through their importer or EU-based “only representative of non-EU manufacturer.” The Commercial Service receives many requests for guidance from U.S. exporters regarding REACH compliance.

Products that use sources of energy, such as televisions, computers, fans and lighting, will soon be subject to new EU energy efficiency requirements. With the 2005 adoption of an ecodesign framework directive for energy-using products, EU regulators laid the groundwork for specific “implementing measures” affecting a broad range of items. The goal is to minimize energy use at the design stage and throughout production, transport, packaging, etc. Compliant products will be easily recognized because they will carry a CE marking indicating product safety and any applicable energy efficiency requirements. Criteria for selecting new implementing measures are the significant impact on the environment coupled with a high volume of sales, with significant potential for improvement in terms of environmental impact without excessive costs.

The apparent costs of complying with the WEEE and RoHS directives as well as REACH and EuP/Ecodesign generally focus on three aspects:

  • Financial compliance costs, such as WEEE or REACH registration fees, testing fees, etc;
  • Costs associated with product redesign and component qualification stemming from RoHS, as well as the costs of the information technology system and business process changes required to cleanse the supply chain of banned substances, not to mention the human resources necessary to plan and manage compliance; and
  • Costs associated with legal aspects, such as preparation of compliance documents, RoHS exemption requests and legal disputes related to compliance. Our stakeholders frequently request opinions as to whether their products are covered by the regulations and directives; they also request explanations of the key concepts and occasionally for assistance in understanding policymaking processes such as the RoHS exemptions procedure.

Standards currently play a relatively minor role in the WEEE, RoHS and REACH areas, and a more important role in EuP. For example, there is a harmonized European standard (EN) for the WEEE mark specifications but none for management and testing standards for RoHS compliance. Neither WEEE nor ROHS calls for using standards for any other compliance aspect. However, this may change because of commission proposals to bring the RoHS directive into the CE marking world.

How would you describe the Transatlantic Economic Council and its progress since its formation in 2007? What areas are priorities? How are standards part of the dialogue?

In April 2007, U.S. President George W. Bush, German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso signed an agreement creating a permanent body that commits the U.S. to “deeper transatlantic economic integration.” The document emphasizes that “the transatlantic economy remains at the forefront of globalization” and that the U.S. and the EU seek to strengthen economic integration. The agreement established a Transatlantic Economic Council to be chaired on the U.S. side by a Cabinet-level officer in the White House and on the EU side by a European Commission member.

Priority action areas include regulatory cooperation, intellectual property rights, trade and security, investment, financial markets, and innovation and technology development. In a broad range of horizontal regulatory cooperative areas, regular consultations between U.S. and European agencies help to share a regulatory agenda and work to harmonize regulatory approaches. For example, in the area of standards policy, the U.S. and the EU are studying their broad legal and institutional approaches to using standards to support regulation. Other TEC priorities include areas where standards play a major role.

In the area of energy efficiency, the partners are working on mechanisms to receive input on setting regulations and implementing energy measures. In this context, biofuels is a vital topic, one where ASTM has made critical contributions. Experts in the U.S. and the EU have consulted with standards organizations on a road map to common global biofuel standards, and work continues to ensure compatibility between the U.S. and EU systems for measuring greenhouse gas emission reductions offered by biofuels. In product and toy safety, another area where ASTM has played a major role, the U.S. and the EU continue to work on agreements to further ensure the safety of imported motor vehicles, food, pharmaceuticals, cosmetics, toys and electrical equipment.

Where do you think the European Union is headed in terms of standards and conformity assessment? What do you think are the most important topics for businesses to understand about this topic in terms of access to European markets?

Indications are that there will be more reliance on standards and conformity assessment by the European Commission for regulations and by industry for quality and safety. There may be more mandated work from the EC to the European standards organizations (standardization requests, or mandates, are the mechanism by which the commission requests the ESOs to develop and adopt European standards in support of European policies and legislation) and more EC control on the focus of ESOs, accreditation bodies and certification bodies.

In general, more involvement from industry is needed both to understand and to contribute to Europe’s direction for standards. In particular, U.S. businesses should pay close attention to the EU’s New Legislative Framework, the modernization of the New Approach for product marketing, published in the Official Journal of the European Union in August 2008. These measures are intended to remove obstacles remaining to the free circulation of products among EU member states.

The intention is that existing market product surveillance systems will be strengthened and aligned with import controls and that these measures will reinforce the role and credibility of CE marking. In principle, under this legislation a member state that intends to refuse market access will have to talk to the enterprise and give detailed reasons for any possible refusal. The package of measures should impact a large number of industrial sectors.

European standards created under the New Approach are harmonized across the EU member states and European Economic Area countries to allow for the free flow of goods. While harmonizing EU legislation can facilitate access to the single EU market, the Commercial Service alerts U.S. manufacturers that they should be aware that regulations and technical standards might also function as barriers to trade if U.S. standards are different from those of the EU.

Due to the EU’s vigorous promotion of its regulatory and standards system as well as its generous funding for its development, the EU’s standards regime, as embodied in CEN, CENELEC and ETSI — European Committee for Standardization, European Committee for Electrotechnical Standardization and European Telecommunications Standards Institute — is wide and deep, extending well beyond EU political borders to include affiliate members (countries hoping to become full members) such as Albania, Croatia, Macedonia, Turkey and others. Another category, called partner standardization body, includes the standards organizations of Australia and other countries, which are unlikely to become CEN members or affiliates for political or geographical reasons. Other countries are targets of the EU’s extensive technical assistance program, which is aimed at exporting European standards and technical regulations to developing countries, especially in the Mediterranean and Balkan countries, and Africa; other programs are geared for China and Latin America.

With the need to adapt more quickly to market needs, European standards organizations have been looking for new deliverables, which are standard-like products delivered in shorter times. While few of these have been linked to EU regulations to date, expectations are that they will eventually serve as the basis for EU-wide standards.

 

Louis Santamaria became the standards attaché at the U.S. Mission to the European Union in August 2007. Previously, he served as the standards attaché based in Mexico City, as senior commercial officer in Caracas, Venezuela, and as the principal commercial officer in Barcelona, Spain. Santamaria joined the U.S. Department of Commerce staff in 1986 and served in the U.S. Travel and Tourism Administration in Paris, Amsterdam and Mexico City. During his career, he has served on more than 45 projects in 37 countries, and as senior tourism marketing specialist for the Organization of American States. He began his career with Pan American World Airways. A graduate of Georgetown University with a degree in business administration, Santamaria has a master’s degree in tourism from the University of Strathclyde in Glasgow, Scotland. Born in Mexico City, Santamaria speaks fluent Spanish and French.