|From Separate Voices to Harmony
The Role of Standards and Regulation in Eliminating Trade Barriers
by Bill Cunningham
Trade, regulation, and standardization are increasingly being
understood as interdependent. Canadian General Standards Board Director Bill Cunningham describes some of Canadas successes
along the route to this understanding, both interprovincially
(This article is excerpted from Bill Cunninghams presentation
to the 2001 COPANT (Pan American Standards Commission) General
Assembly in Venezuela.)
Searching for Harmony
In Canada, over the years, the voices of trade, regulation, and
standardization have each developed their policy environments,
development processes, and consultative mechanisms. They have
focused on their particular social and economic interests, but
with little regard for the activities of and their impacts on
each other. Historically, cooperation between these three areas
was weak; however, there have been exceptions.
Among the most successful examples are the development of model
codes for the building and construction industries, such as the
National Building Code of Canada and the National Electrical Code.
In Canada regulatory authority over buildings and construction
is typically a municipal responsibility. In the past, the construction
industry faced a hodgepodge of differing and sometimes capricious
regulations from municipality to municipality. The solution, developed
over 60 years ago, was the National Building Code of Canada. Under
the leadership of the National Research Council, this model code
was created by a process of voluntary consultation with technical
experts. The National Building Code combined technical specifications
and incorporated references to several hundred Canadian standards.
The development of the model National Building Code provided Canadian
municipalities with an expert standard that they could adopt without
in any way limiting their ability to set regulations suitable
to local circumstances. And the municipalities did. The Provincial-Territorial
Committee on Building Standards, a committee of federal, provincial,
and territorial authorities, advises the National Research Council
of Canada on the need for building and construction standards
Similarly, the model Canadian Electrical Code was developed for
provincial electrical regulators by the Canadian Standards Association,
one of four accredited standards development organizations in
Canada.(1) Like the National Building Code, the Canadian Electrical
Code provided provinces and municipalities with an expert code
they could adopt while retaining their right to set regulations
suitable to their local needs. The Canadian Advisory Committee
on Electrical Safety, a committee of provincial and territorial
regulators, advises the Canadian Standards Association and the
Standards Council of Canada on the content and the need for electrical
standards in Canada.
Because these codes have been widely adopted by local regulators
across Canada, Canadian and foreign building contractors and construction
and equipment suppliers can confidently market their products
and services in Canada.
Another success story concerns the development of the National
Dairy Code for Canadas food inspection system.
Canadas food inspection system operates in a complex jurisdictional
context. Federal authorities regulate food packaging, labeling,
and advertising. They also establish and enforce health and safety
standards for imports, exports, and interprovincial trade. The
provinces and territories regulate health, safety, and quality
within their borders.
Recently, Canada moved toward a more integrated regime. The 1994
Blueprint for the Canadian Food Inspection System called for harmonized
standards and integrated inspection systems. The Canadian Food
Inspection System Implementation Group has focused on developing
harmonized standards and, in 1997, approved the National Dairy
Code. Now, the Implementation Group is developing similar codes
for meat and retail service sectors.
Their objective is to develop model codes for legislation at all
levels of government, and to promote outcome-based regulations
supported by voluntary codes that describe best practices.(2)
As you can see, model codes have been very successful in Canada.
This standards-based approach has helped bring harmony to a multitude
of internal regulatory jurisdictions without infringing on their
But internal barriers to trade continued to exist in Canada in
many important areas of the economy, including mobility of products,
services, and labor. These internal barriers prevented Canadian
companies from being efficient and achieving the economies of
scale needed to compete in and outside Canada, kept production
costs high, raised government costs, reduced consumer choice,
and undermined social and political harmony.
In 1995, after decades of discussion, the federal government succeeded
in brokering an agreement among the provinces, known as the Agreement
on Internal Trade. This agreement, modeled after international
trade agreements, flowed from a negotiating process among the
provinces similar to that among sovereign states. It established
general rules for the free movement of persons, goods, services,
and investments within Canada in areas where the provinces had
exclusive jurisdiction or shared jurisdiction with the federal
The Agreement on Internal Trade identifies the harmonization of
standards and regulations as one of the principal mechanisms for
eliminating barriers. However, since most Canadian standards are
national, not provincial, it is likely that the most common barriers
are regulatory and related technical specifications rather than
The Agreement on Internal Trade is a step in the right direction.
The agreement has achieved progress in deregulating and harmonizing
interprovincial trucking, in eliminating local residency requirements
in a number of areas, in enforcing consumer protection legislation,
and in establishing a Code of Conduct on Incentives.
But the response to the progress has been mixed. The business
community, academics, and international organizations have criticized
the Agreement on Internal Trade because of the inability of governments
to meet deadlines for completing negotiations, the limitations
on coverage and exclusions, and the cumbersome dispute settlement
Canada has also created harmony between regulation and standardization
by using voluntary standards to complement existing regulations.
The federal government administers the Care Labeling Program,
which encourages garment manufacturers to use the National Standard
of Canada, Care Labeling of Textiles. This Canadian General Standards
Board standard specifies cleaning and safety information that
manufacturers should include on garment and textile labels. The
standard is not referenced in regulation but supplements the Government
of Canadas consumer protection legislation.
Similarly, the validity of non-paper documents as evidence in
legal proceedings is a concern of a number of federal and provincial
government bodies. These bodies recognize the Canadian General
Standards Boards voluntary standard, Microfilm and Electronic
Images as Documentary Evidence, as a key standard without directly
referencing it in their regulations.
Recently, the Canadian General Standards Board has been asked
to develop a voluntary standard for labeling foods to identify
whether they contain genetically modified products or processes.
The government hopes that the consensus standards development
process, and consumer demands for food labeling in this contentious
area, will provide sufficient incentive for food producers to
label their foods without additional government regulation.
There are, of course, many examples of standards referenced in
regulations as a means to ensure that the content of the standards
becomes mandatory. Regulations may incorporate part or all of
technical standards, depending on the interests of the regulator
and the scope of the standard.
The National Fire Code of Canada refers to many standards developed
by Underwriters Laboratories Canada.
I have already mentioned the National Building Code of Canada,
which has been adopted by municipalities across Canada. The National
Building Code incorporates over 200 standards developed by several
standards development organizations, including some international
And the Government of Canadas Transportation of Dangerous Goods
Act refers to a number of standards developed by the Canadian
General Standards Board.
Another way in which Canadian standards are becoming aligned with
regulatory and trade interests is by looking beyond our borders
for opportunities to adopt international standards, such as those
of the International Organization for Standardization and the
International Electrotechnical Commission, as National Standards
But we do not only look in the direction of ISO and IEC. We are
very interested in bilateral harmonization with our major trading
partners. For example, there has been a significant degree of
harmonization between Canadian standards and those of a number
of United States standardization organizations. This harmonization
occurs when Canadian and U.S. organizations agree on the mutual
adoption of technical standards, or the reproduction of the relevant
parts of one countrys standard by the other country, or by the
sharing of the same or equivalent test methods.
The International Score
Throughout the history of modern trade agreementsthe General
Agreement on Tariffs and Trade (GATT) and its successor, the World
Trade Organization (WTO)Canada has been an active participant.
Canada has always believed that in a world of larger traders,
the promotion of Canadian trade interests depended on a multilateral
framework of rules and appropriate procedures and on an institution
to enforce them.(3)
Early on, Canadians played a large role in GATTs development,
chairing various committees and working groups, injecting ideas
and proposals into discussions, and finding formulas that could
overcome stalemates among the major players. Our commitment paid
rich dividends in later years, giving Canada an influence in international
economic affairs disproportionate to our economic power.
With the confidence gained from our earlier experience in GATT,
Canada negotiated a free trade agreement with the United States
in the 1980s, consistent with GATT, that created a combination
of more competition at home and greater export opportunities in
the United States. Subsequently the agreement was expanded to
include Mexico, becoming the North American Free Trade Agreement
As I stated earlier, the reduction of tariff barriers has moved
the focus of trade interests now to reducing or at least harmonizing
the non-tariff barriers to efficient trade. Canada is a signatory
to the WTO Agreement on Technical Barriers to Trade and has taken
steps to implement the requirements for technical regulations,
standards, and conformity assessment.
Because Canadas economy is dwarfed by those of our key trading
partnersthe United States, the European Union, and JapanCanadians
rely on the use of international standards to help ensure the
competitiveness of domestic goods and services. International
standards are critical to our standardization activity. For instance,
in a recent three-year period, almost 80 percent of the National
Standards of Canada approved by the Standards Council of Canada
were based on international standards.
Canadas federal regulatory policy requires that federal regulators
respect international and intergovernmental agreements. In particular,
for technical regulations that affect trade, federal regulators
must notify the public of intended activities; specify technical
requirements in terms of performance where possible; use available
international standards, guidelines, and recommendations where
those standards achieve the regulatory objective; and consider
accepting as equivalent other forms of technical regulatory requirements.(4)
Obviously then, one of the easiest ways for regulators to reduce
non-tariff barriers is to reference national standards, particularly
those based on international standards, in their regulations.
Canadian regulators know the benefits of developing standards
and are seeking ways of working more closely: (5, 6)
International and national standards can be the basis for harmonization
with other jurisdictions.
Standards can be written in plain language, improving comprehension.
Standards can be more responsive to new and changing technologies
because they are easier to update or change than regulations.
The consensus process of standards development provides transparency
and improves prospects for acceptance and compliance.
The same standards can be referenced easily by other authorities.
Nevertheless, Canadian regulators have identified some real and
perceived obstacles to referencing standards in technical regulations:
There is a public perception that use of standards is an abrogation
of regulators responsibilities.
The composition of standards development committees may not
always be a balance of interests and may be unduly influenced
Necessary changes to standards may not be made when consensus
is difficult to reach.
Standards development organizations may not be able or willing
to undertake high-risk projects.
Participation by regulators in the development and maintenance
of standards requires a significant commitment of resources.
Against this backdrop of pluses and minuses, Canada continues
to harmonize its trade, regulation, and standardization policies.
The federal government has established two committees to encourage
communication and sharing of experiences: the Interdepartmental
Standards Committee, which provides a forum for federal regulators
to discuss standardization issues related to their responsibilities,
and the Trade and Regulation Interdepartmental Committee, which
provides a forum for federal trade experts and regulators to discuss
policy issues related to our international agreements.
I have described how our relatively small economy has exerted
significant influence in reducing international trade barriers,
and our experience in reducing domestic trade barriers between
our provinces and various levels of government. As well, I have
provided some examples of how Canadas regulators have used standards
to overcome trade barriersexamples that included model codes,
standards referenced in regulations, and voluntary standards as
complements to regulatory programs.
It is clear that closer harmony between trade, regulation and
standardization is key to Canadas success in the global economy.
1 The Standards Council of Canada has accredited four Standards
Development Organizations in Canada: Canadian General Standards
Board (CGSB), Canadian Standards Association (CSA), Underwriters
Laboratories of Canada (ULC), and Bureau de Normalisation du Québec
2 Canada, Industry Canada, Standards Systems: A Guide for Canadian
Regulators (Ottawa, 1998). Retrieved August 2001, from the World
Wide Web: http://strategis.ic. gc.ca/sc_mrksv/regaff/stdguide/engdoc/
3 Michael Hart, Globalization and Standardization: Does a Global
Economy Need Global Rules? paper prepared for the Regulatory
Affairs and Standards Policy Directorate, Industry Canada (November
4 Canada, Privy Council Office, Government of Canada Regulatory
Policy (Ottawa, November 1999). Retrieved August 2001, from the
World Wide Web: http://www. pco-bcp.gc.ca/raoics-srdc/reg-pol/reg-
5 Canada, Office of the Auditor General of Canada and the Commissioner
of the Environment and Sustainable Development, Federal Health
and Safety Regulatory Programs (Chapter 24), 2000 Report of the
Auditor General of Canada (Ottawa, November 2000).
6 Dr. Elizabeth Nielsen, Health Canada, Office of Regulatory and
International Affairs, Health Products and Foods Branch, Standards
and the Management of Health and Safety Risks, presentation to
the Interdepartmental Standards Committee (March 2001).
Copyright 2001, ASTM