The new trade agenda
In a world where many countries might miss out on global trade, conformity assessment emerges as the essential component to establish confidence, trust and good practice.
Holiday bookings surged this year, including the season’s paraphernalia, from exotic fruits jostling for space on supermarket shelves to beachwear and sandals manufactured in far-flung places. And as we busied ourselves sharing selfies and holiday snaps, we would be surprised to learn of the circuitous journey of most of our smartphone components.
We barely give a thought to how they reach our shores, but long gone are the days when the movement of goods and products around the world was a relatively straightforward process. The sturdy vessels that once plied the seas bearing spices have given way to massive supertankers packed to the gunwales with sea containers and the rise of super-sophisticated, mega trading hubs such as Singapore.
The arrival of the digital age has given fresh momentum to the rapid transformation of our trading systems – and added new layers of complexity. This was neatly summed up by Pamela Coke-Hamilton, Executive Director of the International Trade Centre, speaking at the World Economic Forum Annual Meeting 2022 in Davos in May. “There is a misconception driving the narrative on trade focused on goods. While it is true that there are disruptions [to supply chains], trade in goods over the last year reached a record high. The digital economy has accelerated a major shift in the way goods and services are consumed,” she said.
We hardly need reminding that we all stand to benefit from trade.
Global trade is thriving
Despite the pandemic and lockdown brake on economic growth, global trade is again thriving. According to UNCTAD (United Nations Conference on Trade and Development), imports and exports in leading trading economies have bounced back to above pre-pandemic levels. Its Global Trade Update says: “Overall, the value of global trade reached a record level of USD 28.5 trillion in 2021.”
That’s the good news. The not so good news is that the rapid increase in the complexity of international trade is causing challenges not only for companies but also governments and citizens. We hardly need reminding that we all stand to benefit from trade. The World Bank states that countries that are open to international trade tend to grow faster, innovate, improve productivity and provide higher income and more opportunities for their people.
But in our highly interconnected, increasingly automated world driven by Fourth Industrial Revolution technologies such as artificial intelligence and big data analytics – all requiring access to quick and reliable mobile Internet – these benefits are not being spread around the world equally. And the challenges are not all high-tech-related; some countries are suffering from too much red tape at borders and a lack of workforces with the requisite skills for the digital age. Trade suffers and, as a result, people suffer.
The answer may lie in conformity assessment.
Enabling best practice
What can be done to streamline processes and enable best practice for trade and commerce, as well as establish confidence and trust in a transparent and reliable system, including countries in the developing world?
The answer may lie in conformity assessment, or, more specifically, in the shape of the new standard ISO/IEC 17060:2022, Conformity assessment – Code of good practice. Warren Merkel, Chair of the International Conformity Assessment Committee (ICAC), the US technical advisory group to ISO’s conformity assessment committee (CASCO), and one of the co-convenors of the working group that revised ISO/IEC 17060, explains why the standard is so essential for building healthy economies.
He acknowledges that conformity assessment is inherently technical, “requiring consideration of multiple factors”. However, he goes on to say that effective conformity assessment – be it mandatory or voluntary, public or private sector – provides confidence that requirements have been met. And therein lies the key – that confidence, he says, is critical to the operation of healthy economies. Merkel continues: “If stakeholders have confidence that what they buy, use or interact with meets relevant standards and will do what is expected, then commerce happens.”
By the same token, of course, choosing the wrong conformity assessment approach can have significant negative consequences both within and among affected economies. However, ISO/IEC 17060 provides a gateway into the process of developing effective conformity assessment, identifying basic best practices when considering how to determine that specified requirements have been fulfilled.”
Confidence is critical to the operation of healthy economies.
The CASCO Toolbox
Merkel is aware that it’s not a complete solution but rather “a primer” that can lead users to consider the other tools in the CASCO Toolbox. The toolbox gives organizations the means to take responsibility for their own compliance and can reduce costs for governments when regulatory schemes use recognized private-sector conformity assessment providers.
This primer also benefits imports and exports. The good practices identified in ISO/IEC 17060, Merkel says, are rooted in the CASCO Toolbox standards. “Use of these internationally recognized standards as the basis for conformity assessment has the potential to facilitate trade.”
He returns again to the importance of establishing confidence. “When importers and exporters have confidence in the competence of conformity assessment bodies and the results they produce, understand the processes they use and know that conformity assessment practices are conducted consistently in the respective economies, a major source of uncertainty associated with international trade is minimized.”
And it’s a two-way process. Ideally, conformity assessment performed in the exporting economy will then be accepted in the importing economy without the need to be repeated. It’s a win-win scenario that builds trust and confidence and can do us all the world of good.