Regional Standards for South Asia

In a bid to overcome the prolonged complexity of Non-Tariff Measures (NTMs) in South Asia, the move to set up the South Asian Regional Standards Organisation (SARSO) is important. The regional body started in operation last year having its secretariat in Dhaka. Thus, it is the newest body under the umbrella of South Asian Association of Regional Co-operation (SAARC) to support regional integration. The basic objective is to facilitate coordination and cooperation among SAARC member countries in the fields of standardisation and to develop a set of harmonised regional standards. Such standards will not only reduce the Non-Tariff Barriers (NTBs) in the regional trade, but will also help enhance global trade of the region.
UNDERSTANDING STANDARDS: To put it simply, standard is a required or agreed level of quality or attainment of a product and service and also a kind of benchmark used as a measure, norm or model in comparative appraisal of products or services. Thus, it is a documentation providing rules, guidelines or characteristics of any product and production methods and has to be approved by a recognised body.
But there are lot of complexities regarding standards. These are intertwined with technical categories of NTMs - Technical Barriers to Trade (TBT) and Sanitary and Phyto-Sanitary Measures (SPS) in the WTO law.  Moreover standard is considered as a component of TBT. The so called mandatory standard is a technical regulation under TBT while voluntary standard is simply standard under TBT. Again, there are three types of standards in general. These are: product standard, procedure standard and management system standard. Product standard is the most used standard which deals with the characteristics of a good or service and indicates quality, safety and fitness aspects of a product. For example, Bangladesh Standard and Testing Institutions (BSTI) has set standard of using minimum 10 per cent fruit pulp to be eligible as a fruit drink. Procedure or process standard deals with conditions under which a good or service is produced, packaged and/or refined.  For instance, after meeting certain conditions for producing fruit drink, the product's process can be termed as 'toxic-free' or something like this. There are safety standard and environmental standard also.
Standard is generally set by a dedicated government or public body like BSTI in Bangladesh or Bureau of Indian Standard (BIS) in India or Food and Drug Administration (FDA) in the United States.  These bodies set standards for different kind of products , and producers of these products have to maintain the set standards. These standards are also applicable for the same and similar kind of imported products. Without approval or certification of such bodies, marketing a product in a given market is considered illegal and so punishable.
To determine whether a product complies with the required standards, testing is a must. Testing can be done in accredited or authorised laboratories. Usually, testing is done on random selection basis. Permission for marketing a product is given only if testing satisfied the standard requirements. For example, permission is reflected in the logo of BSTI in a biscuit packet in Bangladesh.
Standard has utmost importance for all parties of the product. These include producers, traders and consumers. It is not possible for consumer to know whether a certain product has maintained any prescribed standard or not. It is also difficult to know what components are used for producing a product or whether the production process of a food item is hygienic or not. Standards help to answer many of these questions.  As mentioned in above example, BSTI logo is a testimony that the product has maintained required standards and is safe for consumption.     
REGIONAL STANDARDS: Standards vary from country to country. Developed countries have much complex, elaborate and sophisticated standards while developing and poor countries have lots of limitations in standards.  Thus, it is quite difficult for Bangladeshi manufacturers to fully comply with standards set out in the United States or Japan. The concept of global or international standard is also to some extent misleading. The WTO doesn't bind its members to follow any unique set of standards but recommends not to apply standards in a manner that might constitute a "disguised restriction to international trade". However, the two agreements TBT and SPS of the WTO are considered as comprehensive rules and guidelines for global standards and member countries have to set or develop their standards as per the WTO rules.  So, any member can challenge any standard of another country if the later is found not to follow the WTO rules. But this is a complex procedure.
There are several international bodies for standardisation in different products and services. These include International Standard Organisation (ISO) and Codex Alimentarius Commission. Codex is actually a joint initiative of the World Health Organisation (WHO) and the Food and Agriculture Organisation of the United Nations (FAO). Standards, however, set by these organisations are not legally binding for any country. That's why, any ISO or Codex standard adopted by Bangladesh may not be accepted by India but acceptable to Pakistan.  So, for exporting such products from Bangladesh to India, standard set by BIS has to be complied with.
Such a problem is not unique for Bangladesh and India or for countries in South Asia. For the last 50 years, many countries and regions in the world have been facing similar problems originating from differences in standards. Many of them adopted `regional standards' or 'harmonisation of standards' and 'mutual recognition of standards.' Harmonisation of regional standards means the convergence of national standards towards a common set of requirements agreed to by all the countries in the region. To put it simply, harmonisation is basically replacing two or more rules or procedures by a single one. For instance, if SAARC countries decide to harmonised standards on food product, they have to adopt a single set of requirements equally applicable to all the eight member countries. Mutual recognition means acceptance of standards of a partner country by another country. It allows each country to maintain its own standards but asks each country of the region or group to accord equal treatment to goods produced in the regional countries. It is also known as conformity assessment.  For example, if SAARC countries agree on mutual recognition of standards of cement, Bangladesh or any other regional countries' cement that conform to respective national standards can be put on the market of regional partner countries, even if they do not comply with the standards of partner countries.
No doubt, harmonisation or mutual recognition at the regional level is cumbersome than it is at the bilateral level.  Nevertheless, regional arrangement is better as smaller and weaker economies can also negotiate and get time for adjustment.
MOVE IN SOUTH ASIA: As mentioned earlier, after reducing the tariff barriers, it is the NTBs that are hurting expansion of intra-regional trade in South Asia. SAARC intra-regional trade volume stood at $49.6 billion last year which was only 5.11 per cent of the region's global trade. Again, all the NTBs are not deliberately imposed to create trade barriers; a good number of them are meant to ensure health and environmental safety of the respective countries. Moreover, there are still some differences among the SAARC member countries on defining NTBs.
Against the backdrop, establishing the SARSO is a positive step. Through the organisation, the eight member countries of SAARC will be able to negotiate for a common set of standards on different products.  The body will also help develop capacities of smaller economies (Bhutan, Nepal and Afghanistan) to deal with complexities.
Already 35 products have been selected for developing SAARC regional standards on a priority basis and seven standards have been finalised. These are: refined sugar, biscuits, code of hygienic practices on dairy products, hessian, cotton twill and cotton drill. Six Sectoral Technical Committees (STCs) are working for developing regional standards. The committees are on food and agricultural products; jute, textile and leather; building materials; electrical, electronics, telecom & IT; chemical and chemical products; and conformity assessment. Technical experts from the SAARC member countries are there.
No SAARC regional standard, however, has come into effect so far and it will take more time as the SARSO defined standards have to be formally endorsed by all the countries. Beside this, member countries have to develop their own capacities to deal with standards and related issues, especially TBT and SPS measures. Finally, as same is the case with all other SAARC initiatives, it is the political will of the member countries that will ultimately pave the way for effective and meaningful functioning of the SARSO.
Standards are becoming more and more important in global trade. The surge of mega trade deals like the TPP (Trans-Pacific Partnership) will not only subdue the multilateral trade regime as well as liberal standards, but also force many countries to go for stringent standards. Thus, harmonised regional standards will help Bangladesh to cope with the stringency in the long run.
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