As trust is a crucial factor in global trade, accredited certification is an important tool for market confidence in product characteristics and services.
This is what comes up from the research publication “International trade, the value of accreditation and standardization", realized on behalf of Accredia, the Italian Accreditation Body, by Lucia Tajoli and Luca Salvatici, economics professors who teach at leading Italian universities.
Presented on the 14th of May in Rome, the research publication analyses the effects on international trade of non-tariff measures (NTMs), defined as production or product requirements on imported goods and services and how Quality Infrastructure deals with them. Quality Infrastructure (QI) is the reference framework necessary to ensure and demonstrate to the markets the quality of products and services that empowers any form of economic integration. It consists of accreditation, conformity assessment, standardization and metrology.
NTMs can lead to increased costs for accessing foreign markets but they are often used in developed economies to protect legitimate interests such as safety, health and the environment.
Moreover, differently from tariff measures such as customs duties, NTMs can produce a positive effect on international trade through an increase in the trustworthiness concerning the input specifics for companies and consumer goods for citizens. This is possible when the use of international standards along with accredited certifications reduces commercial costs. There are advantages for companies, which avoid uneven and non-transparent procedures to adequate productions to the import economy regulation, and for consumers, who can benefit from price reductions and a wider range of imported goods and services.
The functioning of conformity assessment as a boost for international trade is based on the recognized equivalence of accredited conformity assessment performed in different economies, whose reliability level is guaranteed by a rigorous peer review system that Accreditation Bodies (ABs) are subject to. ABs that successfully obtain the status of signatories of the multilateral agreements make the accredited conformity assessment valid in every economy in the mutual recognition network.
As an example of excellence, the Single Market in Europe represents the most advanced form of economic integration and Quality Infrastructure plays a fundamental role in coordinating national regulations. This framework ensures a level playing field for European companies, stimulating innovation and competitiveness. According to the European Commission’s estimates, the integration of European markets has increased GDP by over 300 billion euros and created 2.8 million jobs between 1992 and 2006.
The recent regional agreements stipulated by the European Union deal with non-tariff measures and the equivalence of certification procedures. These aspects are stated in specific annexes, which refer to the Institutions of Quality Infrastructure. The Comprehensive Economic and Trade Agreement with Canada (CETA) entered into force at the end of 2017, introduced the equivalence of certification results and tests performed by accredited Bodies and Laboratories on specific product categories. Subsequently, Italian companies recorded a 4.5% export growth towards Canada in 2018, equal to 10% in the textile-apparel and machinery sectors.
With reference to the agreement with South Korea, the first signed by the European Union with an Asian country, it contributed to the facilitation of trade between Italy and South Korea. The growth of Italian exports to this market reached 18% from 2011 to 2017, which is double compared to our level of trade worldwide.
Italian Exports to South Korea. Index numbers (2011=100), Source: UNCTAD data processed by Accredia
In a period when multilateral agreements are stuck, Preferential Trade Agreements (PTAs) regulate NTMs, as these have a relevant impact on trade flows. If correctly coordinated, national regulations could bring a positive effect on exports.
As part of the Quality Infrastructure, accreditation ensures product quality and represents one of the pillars on which international trade rests. This is why companies choose an accredited certification to satisfy and “signal” to the market specific requirements of reliability and quality. As the research pointed out, certified companies that join Italian value chains in the textile and apparel sector have experienced a 30%-60% productivity growth.
In conclusion, the PTAs of mutual recognition and coordination of national rules is fundamental in facilitating a positive market integration with pros for companies and citizens.
To learn more, you may refer to the research publication “International trade, the value of accreditation and standardization".