Private Standards:

Private Standards:
Proliferation in international trade but little
wto guidance
Business associations and corporations are traditional standard setters, often in
cooperation with governmental regulators first at national level then
internationally. ANSI in the U.S. and CEN in Europe, as well as ISO in Geneva are
examples. These groups have defined everything from electrical connections to
steel categories. Those most affected have been the very businesses that
helped to create the criteria they were asked to follow. Then, non-governmental
organizations began to develop environmental and social criteria, among
others. These criteria are voluntary, but some have become tests of acceptance
by business and retail customers of certain products and processes. The
standards of the Forestry Stewardship Council are an example. Currently, global
corporations and their associations are creating product and process standards
that are made mandatory through contract law, enforced through audits and
certification and applied worldwide without regard to WTO rules or the
international inter-governmental standard setters, e.g., the Codex Alimentarius
Commission for foods. This sequence explains the current discussions about
standards proliferation. However, it is the most recent corporate foray into
private but globally applied standards that led many exporters and others to
look to the SPS and TBT Agreements and their Committees to determine
whether the WTO Agreements apply to these forms of private action. National
regulators are also concerned that the contractual private standards are, in
effect, displacing less demanding local law. They are asking about the
relationship between the trad rules and international business. The responses
from the WTO Committees provide little guidance, but some issues have been
identified. Yet, the global contract law of private standards could be in the
process of displacing WTO considerations as they have displaced some national
May 26, 2011
Professor Marsha A. Echols
HEC Abstract