Private Standardization and International Trade in Goods: Any WTO Law Implications for Domestic Regulation?

Abstract

Private-sector standards are the standards developed and adopted by different types of private entities such as industry associations, NGOs, large retailers and commercial companies. Nowadays, these standards are widely applied on a voluntary basis by main market players in developed and some developing countries. If adopted and applied without due regard to the interests of the relevant stakeholders, private-sector standards may became significant barriers to trade and, thus, restrict market access, especially for small-scale and developing country producers.

WTO law contains important obligations for WTO Members with respect to regulation of technical barriers to trade, including those created by non-governmental entities. It is not, however, obvious whether and to what extent these obligations may be applicable to private-sector standards. Certainly, WTO law prescribes rights and obligations only applicable to WTO Members, and, therefore, it may not be directly applicable to private standardizing organizations. Instead, WTO Members might have certain obligations imposed by WTO law to discipline private behaviour within their jurisdictions.

The present paper mainly discusses three important issues. First, it briefly describes the diverse ‘world’ of private-sector standards. Then, it addresses the implications of WTO law for regulation of private standard-setting and the tools available to WTO Members in their domestic regulation in order to discipline private standard-setting activities. In conclusion, the paper argues that the obligations of WTO Members may extend only to private-sector standards, which receive sufficient level of governmental support or incentives. This conclusion is based not only on the relevant provisions of WTO law, but also on the considerations that the tools available to WTO Members in their national legal orders to regulate private standard-setting activities are quite limited.

Presented at the SIEL 3rd Biennial Conference Singapore 2012

Keywords: Standardization, Standard, Private standards, Private-sector standards, Labeling, Technical barriers to trade, Trade barriers, Market access, TBT Agreement, Private regulation, SPS Agreement, GATT, WTO law, Private labeling

JEL Classification: F02, F10, F20, F30, F40