Commerce Deputy Secretary Robert Mallett
ASME-Industry Standards Summit
Washington, D.C.
April 15, 1998
Thank you, Jim, and good morning.
As anyone in Washington quickly learns, there are plenty of things you cannot
do ... more things you should not do ... but one thing you must do. And that is
get invited to lots of conferences. So I try to select wisely, and when I discussed this invitation
with Ray Kammer, it became very clear this is one I absolutely should do. So, I am
grateful to be here.
I joined the Commerce Department at what is a great time to own a business in
America. Since President Clinton has been in office, 15 million new jobs have been created.
Unemployment is at its lowest level in 24 years. Inflation is at the lowest level in 30 years. We
have the highest home ownership in history. And the federal budget deficit is about to become a
surplus -- the first in 30 years. Clearly, these are good economic times. And clearly we need to
maintain our momentum.
Our robust economy must continue to grow so all Americans have the opportunity to
improve their own bottom lines -- so they can raise the quality of their lives and invest in an even
better future for their children. President Clinton believes that to keep the economy strong,
training and education must be our highest priority. For today, we have more jobs than people
with the skills to fill them. Every time I speak to business people about the need for trained
workers, I see the heads nod. They all know it's true.
Secretary Daley believes very strongly that technology will keep the economy growing.
In fact, as we meet, Secretary Daley is releasing a major study that shows information
technologies have been responsible for -- listen to this -- one-quarter of the growth of this
remarkable economy. And let me say, the President -- and particularly the Vice President -- have
made sure that as we cut the budget, we still maintained investments in science and technology.
We have several good programs at Commerce, by the way. Our Advanced Technology
Program, which co-funds with industry--high-risk R&D ........ our Manufacturing Extension
Partnership, more than 400 locations strong, helping smaller manufacturers apply technologies ...
and, of course, the NIST Laboratories, where the nuts and bolts work gets done.
I know ASME has been very supportive of these programs, and I thank you.
And one other way to keep the economy strong is through trade. And we are developing
trade in new areas of high potential. Twenty years from now, history will show that the
President's trip to Africa had a great impact -- it opened the door to Africa, just as President
Nixon's historic trip to China changed our view and focus on that country. Africa is a continent
larger than the US, Europe, China, and Japan combined. Over 700 million people. We have more
exports to Africa than to all of the former Soviet Republics combined. But still trade with Africa
is only 1% of all US exports.
This evening, the President leaves for Chile. Secretary Daley will be joining him. They
will be attending the Summit of the Americas, with leaders from every democracy, to begin the
work to make this hemisphere a free trade zone by 2005. Forty percent of America's exports go
to this hemisphere. Our exports to this region are growing at twice the rate they are to any other
region in the world. This is a new global economy. And I think everyone in this room would
agree. We need a vision of how we can make U.S. product inspections and tests acceptable
everywhere ...and maintain the highest level of protection of safety and the environment.
Over the past century, 600 U.S. organizations have evolved to address the technical
needs of specific industries. They have done their job well, and some -- like ASME -- have
developed a national and international consensus that is relied upon in scores of nations. But too
often we are a bystander on the international scene. And to be honest, that's just how competitor
nations and companies prefer us to remain. Well, we want to change that.
I firmly believe U.S. industry leaders -- you -- should have more than a passing interest
in developing international standards. These standards will dictate the terms of U.S. access to
global markets, and the terms of our relationships with foreign suppliers and customers. And,
obviously, they will influence the nature of new product development. Just think about this: in
the 1970's, international standards accounted for about 10 percent of those used by U.S. industry.
Today, it is 45 percent. In 2000, it will be more than 50 percent. Technical barriers to trade can
put us at a tremendous disadvantage. As you know, trade barriers come in two forms: tariff
barriers and non-tariff barriers. The tariff barriers are the most obvious, and we have aggressively
tackled them.
But today, the most intractable, the most sinister, and the hardest to eliminate are the
non-tariff barriers. Lack of intellectual property protection. Lack of transparency. And product
testing and certification. And conflicting standards.
We have found that key foreign competitors of the United States, particularly the
Japanese and certain countries in Europe, are targeting their programs to embed their national or
regional design and engineering technologies in standards and regulations adopted in Asia and
Latin America. These fast-growing markets are the future of world trade, and America cannot
ignore this challenge. US companies cannot compete when forced to design and manufacture
their products to narrow national and regional standards, like those of Europe and Japan, that do
not reflect the broader needs of global markets.
Our challenge is two-fold. First, international standards institutions could become
dominated by narrow regional standards that reflect positions of one technology and one market
rather than standards that support global trade. Second, in key Latin American and Asian markets,
the United States must ensure that "technology- and trade-neutral" standards and regulations are
adopted and maintained. Both the US government and the private sector, especially multinational
companies and the voluntary standards community, must be fully involved in this problem.
Conflicting standards, unnecessary testing and certification requirements, duplicative
government regulations -- these are the tools nations use to shield their companies from global
competitors. We call them the stealth weapons of trade. All they do is add a hefty sum to the
cost of doing business, so our manufacturers have a tougher time competing. Let me give you
some examples. Last year, American car companies said that differing regulatory and certification
requirements in Europe added 10 percent to their costs.
The American Electronics Association estimates duplicative testing and certification
requirements can add 10 percent to the cost of sales in Europe. Certifying telecommunications
equipment and information technology products as meeting EU requirements costs our businesses
nearly $1.4 billion yearly. And about half of our exports to Europe have some type of EU
certification -- in addition to meeting country-specific requirements.
And let me say, it's not just Europe. These things hamper our companies in Latin
America, in Asia, and other markets as well. At the November APEC Summit meeting in
Vancouver, the Business Advisory Council described testing requirements as "one of the great
nontariff barriers of the world." And recently enacted legislation on labeling on consumer
products in Mexico would have cost U.S. manufacturers as much as $500 million in lost sales.
But, fortunately, a delay in the enforcement date enabled an orderly transition in packaging to be
shipped to Mexico.
I can tell you that Secretary Daley wants us to work very hard at eliminating technical
barriers to trade. We've made a good start in some areas. There is the recent U.S.-European
Union agreement that calls for mutually recognized testing, inspection, and certification
procedures for five categories of products. They account for $50 billion in trade. We are trying to
do the same with five trading partners in the Asia-Pacific region -- Japan, Taiwan, Singapore,
Australia, and New Zealand. Reducing the need for multiple tests will save U.S. manufacturers
millions of dollars. And in a more forward looking approach, we are working with Canada and
Mexico to develop common communication protocols for the intelligent highway systems of the
future. This will open up better ways of moving goods on highways -- a potential billion dollar
market. All of this is so we can see our vision: to get to a world in which U.S. product tests are
accepted everywhere. We are serious about this.
I am pleased to announce that Commerce will host a major national conference on
international standards on September 23 in Washington to discuss this. It will be in conjunction
with World Standards Day. I invite each of you to take part and to bring your organization's
views to the table. As we have stated in our National Export Strategy, the lack of a strong,
focused US national infrastructure for standards and conformity assessment hampers our
competitiveness in the global trading market. We often find ourselves in a reactive posture. U.S.
activities in standards and conformity assessment are diverse, decentralized, often competing with
one another, and divided between the public and private sectors. The system has generally
worked well to support the domestic goals of health, safety, protection of the environment, and the
technical needs of the U.S. marketplace. However as the EU has strengthened its own regional
technical infrastructure, the United States is increasingly challenged in playing an effective global
leadership role.
We can, we must, we want to do more. Small things help. We helped create an
international standards information network on the World Wide Web. Developed by ANSI, the
system is a catalog of more than 100,000 national and international standards. With ANSI, we are
spearheading efforts to streamline laboratory accreditation procedures. Working with our
partners, we are developing the framework for a national accreditation system. What this may
mean is that U.S. goods that are tested by recognized laboratories would be accepted in all North
American markets without further testing.
We also are working with other nations to help train their measurement and standards
officials. When the Europeans assist developing countries, they help them build a standards
infrastructure that is modeled after -- surprise, surprise -- the European system.
In Africa, for instance, the Europeans are moving in, and these nations are tending to rely
on European standards. We need to change that. We have helped train more than 400 people,
mostly from Latin America, Russia, and all the former Soviet Union, and we need to do more.
We need to target Asia and Africa as well. We also have stationed our experts in five markets: the
European Union, Mexico, Argentina, Saudi Arabia, and India. We think this helps us stay on top
of developments, so we can better advise businesses on potentially troublesome technical
requirements. So, to sum it up, we have an action agenda. And it's one where we've made some
important progress already.
Today, the United States is the world's most prolific exporter; its strongest competitor;
its best innovator; and its most robust economy. Yet, we are jeopardizing our leadership position
-- and perhaps future economic growth -- by not paying full attention to important details of
international trade: measurements, standards, laboratory accreditation. If we do not, we may
discover someday that the devil truly was in the details. So, I challenge U.S. industry and
government to work as partners ... to act aggressively, persistently, and intelligently to advance
our concepts as the basis for international standards. We cannot risk the prospect that our
products and our companies will be locked out of future markets. Exports are the fastest growing
segment of the economy. The opportunity for continued strong growth -- and future prosperity --
is ours to realize.
Thank you very much.