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The Effects of Globalization of Trade on Conformity Assessment

Posted By Nick Maalouf, Wednesday, May 01, 2002
Updated: Wednesday, February 13, 2013

The objective of this article is to provide IAEI members information on the changing scene of conformity assessment resulting from the effects of globalization of trade. It offers the reader a snapshot of the driving forces in the business environment, the important elements of product compliance, the various levels of activities involved in the conformity assessment process, and the developing trends resulting from to the changing environment.

The Overall Business Environment

Regional, continental and global trade agreements such as NAFTA, the European Union single market, GATT, and so forth, are an indication of the ongoing integration of the world trade economy and the opening of markets. They are making regional and international trade freer, and competition more intense and global.

These new economic realities have created new marketplace pressures on all industry sectors. They constitute very powerful forces that are re-shaping every business and every sector, including regulations, standardization, and conformity assessment.

In such a changing world, many are wondering about the role of the regulators as well as the value and future of testing and compliance verification by third party organizations.

The Product Compliance Chain

To appreciate the extent and magnitude of the impact of market changes on product compliance, we must first define the elements involved in the compliance chain and their respective values, and then identify current practices and anticipated future trends.

The major components of the product compliance chain include:

  • product standards and technical codes and regulations;
  • assessment of conformity to verify compliance with the requirements; and
  • accreditation/recognition of bodies involved in product assessment.

Standards/Regulations and How They Are Impacted
Standards are everywhere and cover everything: from the products we use, to the food we eat, and the way we conduct our business.

In the compliance chain, standards are at the core of conformity assessment. Together with codes and regulations, they form the reference documents against which a product, system, or installation is evaluated to determine compliance. They benefit industry by providing common and uniform solutions that are used as a recognized unit of comparison. They also benefit consumers by enabling them to buy products that conform to minimum safety and performance standards.

In trade, it is recognized that by their very nature, standards can either facilitate trade or they can frustrate and impede it.

While standards in general, and product safety standards in specific, will continue to be developed by different levels of private sector and government, they are influenced by trade and mutual recognition agreements, and are moving in the following direction:

  • The development of national standards will need to be done in cooperation with member countries within a trading area.
  • Those bodies that develop standards and codes will also have to think globally rather than just regionally and domestically. As new standards are developed, or existing standards are updated, they will be harmonized with international standards. Only global solutions will satisfy geographically dispersed and vertically integrated industries.
  • International harmonization of standards implies that regulators will have to learn to live with and accept criteria and requirements developed in other jurisdictions, as long as the level of public safety is not compromised. This means that regulators in different trade areas will need to understand regional and cultural differences relative to health and safety.
  • New methods will have to be adopted for maintaining and updating existing standards in order to accommodate the rapid change of technology and the shortening of product development cycle.

Conformity Assessment–What It Entails and How It Will Change

AA standard in itself is of little value unless it is applied in the marketplace, and conformity assessment is one such application. Simply defined, it is a procedure to verify that a product or process complies with a standard.

Conformity assessment is a general term that encompasses many different and sometimes separate, albeit related, activities. In North America, the specific terms used for such activities when applied to products are: testing, evaluation, certification, and follow-up inspections.

While such terms may also be used globally, IAEI members should be interested to know that the international ISO/IEC guides and related documentation provide a more comprehensive grouping of conformity assessment activities and classify them into four types.

Relative to product compliance, the four types of activities can be summarized as follows:

Level 1.Activities performed at this level consist in the determination of the characteristics of the product in question, without rendering an opinion or making a judgment. A test laboratory engaged in level 1 activities would present the results, without making a determination on conformity.

Level 2.This level entails actual "Evaluation for Conformity” of the product against a specified standard and involves a judgment on the part of the assessor. However, depending on the type of evaluation, the assessor could be either a person with authority to make decisions; or someone who can comment on and report the results observed, but is not authorized to make decisions. There are four types of evaluation for conformity as follows:

  • Inspection: Evaluation for conformity by measuring, observing, testing or gauging the relevant characteristics.
  • (Conformity) Testing: Evaluation for conformity by means of testing.
  • Type Evaluation: Evaluation of conformity on the basis of examining one or more specimen of a product representative of production.
  • (Conformity) Surveillance: Evaluation for conformity to determine the continuing compliance of the product.

Level 3.This level is referred to as "Assurance of Conformity.” The aim of the activities carried out under this level is to arrive at a declaration which gives assurance of conformity not only of the product tested, but also of future products that will be manufactured.

This assurance of conformity can be given by an independent third party testing and certification organization, or by the supplier of the product. In the first case we speak of "Certification” or "Listing,” and in the later, we speak of a "Supplier Declaration.”

Level 4.This level involves decision-making by "the body” which will recognize the adequacy (i.e. capability and qualifications) of a certification entity. It is also the case of the official authority who, within the scope of the implementation of a regulation, can authorize the placing on the market of a product on the basis of a certification of conformity with statutory technical requirements. Activities carried out in Level 4 are, therefore, associated with "Accreditation” and "Recognition” respectively.

NRTLs operate conformity assessment services within Levels 1, 2 and 3. However, it is the "Assurance of Conformity” conferred by an NRTL in the form of a "Certificate of Compliance” and the use of a "Certification Mark” on the product which gives all stakeholders (manufacturers, consumers, and regulators alike) the highest value and confidence in the process and the product.

The above classification also shows clearly how, together with third party certification organizations, regulators and accreditation bodies form an integral and critical part of the conformity assessment pyramid of hierarchy, in which they occupy the top spot.

In the present environment of ever-shorter product life cycles, and where technical barriers are disappearing, here are but a few major trends that will influence conformity assessment and the attitude of the regulatory and inspection authorities:

  • In the European Union, self-declaration of conformity (i.e., supplier declaration) has become a reality for many product categories. In North America, some industries in the electrical safety sector are strongly advocating the adoption of this concept. Eventually, the local inspection authority having jurisdiction (AHJ) will be challenged to take a decision on this very critical issue.
  • More foreign certification bodies are setting up bases in North America and gaining NRTL status. More NRTLs means more certification marks and labels being used on products sold in the local markets. Local AHJs will need to adjust to and accommodate this competitive reality.
  • Faster time-to-market and increased demand for customization of products will compel certification organizations to adopt more innovative conformity assessment programs and services, such as field evaluation of products. The inspection authorities will have to recognize this and other trends, and be prepared to be more flexible in accepting new methods of conformity assessment.
  • As international trade grows, so will the push for the ultimate goal of manufacturers trading globally—to have "one standard, one conformance test, one accreditation, and one recognition.”
  • Freer trade and the opening up of markets will increase the likelihood that more "uncertified” imported products will appear on the market. The inspection authorities will have to become more vigilant. They will need the required support and resources to monitor the marketplace and enforce the laws more effectively. Otherwise, public safety may be jeopardized despite all the good intentions of manufacturers and traders.

Conclusion

In conclusion, we must all remember that the need to grow drives the decision to transform and change. A business needs to grow; otherwise, it will die or become marginal. This principle also applies to third party certification bodies. In order to keep adding value, they too will have to change in terms of what services to offer and how such services will be delivered without compromising integrity. Being a critical player in the conformity assessment triangle (regulations, standards, certification), also regulators will need to adapt to the new realities.

Perhaps not all the changes mentioned above will happen in the lifetime of some of us, but one thing is certain: the forces that are driving these new concepts are very powerful, and the train has already left the station.

Entela is an NRTL accredited in the US and Canada, with head office in Grand Rapids, MI, and with several branches in the US, Canada and abroad.


Read more by Nick Maalouf

Tags:  Featured  May-June 2002 

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