Who Approved that Product? Private-Sector Standards Take Lead in Global Commerce — C.D. Howe Institute.
TORONTO, Aug. 29, 2012 /CNW/ – Global commerce is experiencing a rapid
shift from government- to private-sector standard-setting for
everything from product safety and quality to corporate behavior
abroad, according to a report released today by the C.D. Howe
Institute. In “The New Multilateralism: The Shift to Private Global
Regulation,” respected trade lawyer Lawrence Herman identifies a broad
shift to rulemaking by the private sector rather than governments that
has accelerated since the collapse of the World Trade Organization
“This is a wake-up call for governments. While it is beneficial for the
private sector to fill this need in the marketplace, there are also
risks associated with the current proliferation of rules and private
regulatory bodies, noted Mr. Herman. “Governments have been oblivious
to this trend and need to do more to ensure private regulatory bodies
operate in a fair and transparent manner, and don’t stymie competition
or operate as private clubs.”
Typically, says the author, these privately set standards help underpin
cross-border exchanges, and increasingly help facilitate global trade
beyond what WTO rules or other government-to-government agreements have
been able to do.
These standards can have major effect on trans-border acceptance of
products, to the point of often determining the ability of producers to
access markets, he says. As such, they have generally beneficial
effects in smoothing trade, yet they can also have effects detrimental
Mr. Herman argues the task for government is to encourage and assist the
formulation of these business-driven norms, through informal
consultations and effective articulation of the underlying public
interest, and instruments such as mutual recognition agreements.
The model proposed here would include promoting openness and
transparency in standard-setting, encouraging the adoption of standards
that span the needs of both advanced western economies and emerging or
developing economies, and supporting the adoption by standard-setting
bodies of core WTO principles such as non-discrimination.
Canada should give this phenomenon a more explicit place in its global
commerce and competitiveness strategies, he concludes.
SOURCE C.D. Howe Institute