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The Role of Standards in Accessing EU and Global Markets by np6KJuHl

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         “Today, mandatory certification and
              standardization are among the major
              barriers to innovation and development in
              Ukraine. They make introducing a new
              product next to impossible […]”

                                                  - President Yushchenko*
                                                                                                                        1
*Kyiv, Ukraine, July 10, 2008, third Presidential Forum “State and Business Are Partners (source: http://www.ifc.org)
                  ECA’s Quality
                  Competitiveness



                                              Jean-Louis Racine
                                               The World Bank




Knowledge Economy Forum VIII, Fontainebleau             May 1, 2009
                  Outline


• ECA countries compete mostly on price.
• The national quality infrastructure: invisible but
  essential for innovation and trade.
• ECA’s quality infrastructure is not conducive to
  enhancing quality competitiveness.
• Reforms challenges.



                                                       3
How ECA Competes On Quality




                              4
       What is Quality?

                Customer
               expectations




              Quality
Regulations
                              Standards
 and laws


                                          5
               CIS countries are
               lagging behind
 Relative unit values of exports to the EU

Improvements
                                                 Bubble size
  in quality
                                               indicates intra-
 competition
                                                industry trade

                                                Better
 CIS +                                          quality
Georgia


                              Improvements
                                 in price
                               competition


                                             Note: excludes
                                             textiles, apparel and   6
                                             leather sectors
     Most industries in ECA
     compete on price
Number of industry sectors competing on price and quality



   Compete on
  quality in more
     sectors                    Compete on
                                price in more
                                   sectors




                                                            7
             Many ECA countries export in
             sectors with limited prospect for
             quality upgrading
Share of exports to the EU in quality-dominated sector


         Export in quality-
      • Pharmaceuticals
           competitive
      • Machine-tools
             industries
      • Made-up textile articles
                        EU + Turkey
                                 Export in price-
                                   competitive
                                    industries

                                       • Articles of concrete
                                       • Basic iron & steel
                                       • Primary batteries
                                                      CIS +
                                                      Georgia

                                                                8
In the CIS economic restructuring
has led to mixed opportunities for
quality upgrading
Share of exports to the EU




                                     9
               Upgrading strategies
               for ECA

• CIS + Georgia: diversify into sectors with
  quality upgrading potential.

• EU, Turkey and Balkans: focus on
  diffusing existing quality practices to more
  enterprises.



                                                 10
           Overview of
the National Quality Infrastructure




                                  11
               What is the national
               quality infrastructure?




                                        Conformity
Standards   Accreditation   Metrology
                                        Assessment




                                                     12
               Accreditation &
               conformity assessment
             National accreditation
                     body


                                     accreditation


Certification bodies, inspection bodies, calibration
          laboratories, testing laboratories

                                  conformity assessment


        Firms and other organizations
                                                          13
                              Metrology

                        National metrology institute



                              Calibration laboratories



                  Manufacturers, research institutes, universities




National and international consumers, public health and safety, natural environment
                                                                                      14
          International Integration


Mutual Recognition Agreements (MRAs) in
accreditation and metrology ensure that
trade partners recognize each other’s
conformity assessment systems




                                          15
ECA’s Quality Infrastructure




                               16
                       Key Issues in ECA

In ECA, the national quality infrastructure is often
• Based on technical regulations (i.e. mandatory standards)
• Highly centralized and dominated by government institutions
• Often not harmonized with and not recognized by that of trade
  partners




                                                                  17
                                                                    There is a strong effort to harmonize
                                                                    standards in countries bordering the EU,
                                                                    but not in CIS countries


                                         Composition of the national standards
                                    35
number of standards




                                    30
                      (thousands)




                                    25
                                    20
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                                    10
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                                                        There are two major
                                                        gaps with accreditation
• Accreditation rates are very low in some countries…

                       Share of testing laboratories which are accredited
    share of accredited laboratories




                                       100%
                                        90%
                                        80%
                                        70%
                                        60%
                                        50%
                                        40%
                                        30%
                                        20%
                                        10%
                                         0%
                                              Georgia   Serbia   Armenia    Kyrgyz Ukraine   Albania
                                                                           Republic


                                                                                                       19
                                                         There are two major
                                                         gaps with accreditation
• …and…


 Number of accredited ISO 9001 certification bodies
  Number of accredited ISO 9001 certification bodies
    35
 Number of accreditations granted




                                    30
                                    25
                                    20
                                    15
                                    10
                                     5
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                                                                                              20
                                                            There are two major
                                                            gaps with accreditation
• …and many accreditations are not internationally
  recognized
   Number of accredited ISO 9001 certification bodies covered by an MRA
                                    35
 Number of accreditations granted




                                    30
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                       0
                           1
                               2
                                   3
                                       4
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       Czech Republic
                Estonia
              Germany
                Poland
                  Spain
                 Turkey
       United Kingdom
                  Latvia
              Lithuania
               Slovenia
                Ireland
       Slovak Republic
                  Brazil
                  China
                   India
               Malaysia
               Bulgaria
                                                   Number of accreditation MRA fields




              Romania
                Albania
               Armenia
            Azerbaijan
                Belarus
Bosnia and Herzegovina
                Croatia
       FYR Macedonia
               Georgia
               Hungary
           Kazakhastan
       Kyrgyz Republic
               Moldova
           Montenegro
    Russian Federation
                                                                                        are internationally isolated




                 Serbia
              Tajikistan
          Turkmenistan
                Ukraine
                                                                                        Most ECA accreditation systems




            Uzbekistan
22
                                          total number of CMCs
                G
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                     m




                                   200
                                         400
                                               600
                                                       800
                                                                       1000
                                                                              1200
                                                                                     1400
                                                                                            1600




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                                                                                                   Number of registered calibration and measurement capabilities




                                                      CIPM MRA
                                                                                                                                                                   are not widely recognized
                                                                                                                                                                   Metrology systems in ECA




                                                     Not part of the




  23
                                                                Some metrology institutes are
                                                                not contributing to economic
                                                                development
                         Number of calibrations conducted by the national metrology institute

                         35000                                                                                             900

                                                                                                                           800
                         30000                                                              Total number of calibrations




                                                                                                                                 Number of calibrations by IVA
                                                                                                                           700
Number of calibrations




                         25000                                                              Total number of calibrations
                                                                                                                           600
                                                                                            per $1 bln industry value
                         20000                                                              added                          500

                         15000                                                                                             400

                                                                                                                           300
                         10000
                                                                                                                           200
                          5000
                                                                                                                           100

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                                                                                                                                                                 24
                                                                                              R
                                                                                            FY
               Incentives for Reform




• EU accession
• WTO Technical Barriers to Trade agreement
• Export competitiveness
• Business environment



                                              25
                    Key Challenges

• Adopting international standards takes time, money
  and skills
• An abrupt transition to an international voluntary
  system will results in temporary gaps in the national
  quality infrastructure
• Incentives are reduced if regional trade partners are
  not using international standards either
• Political economy challenge of transition to a voluntary
  decentralized model
   – Weakened institutions
   – Removal of technical barriers to trade
                                                             26

								
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