Product Standards in Mega Trade Agreements
The Cohen Group is a Washington D.C.-based firm that advises corporations on political, legal, and regulatory issues that impact their business strategy. Following discussions with the Cohen Group, the Capstone team addressed two questions:
- How will the international TTIP, TPP, and RCEP agreements affect product standards for end- user electronics products?
- What will be the business implications due to changes in international product standard regimes?
To address these questions, the team researched past bilateral and multilateral agreements of negotiating countries and conducted a thorough review of product standards and their development processes in order to illuminate the regulatory debates in current negotiations.
The research was constrained by two prominent issues: First, new innovations that blur the line between products and services- such as cloud-based technology, were not addressed in previous agreements and thus have no precedent; Additionally, the sensitivity and secrecy of current mega trade deal negotiations hamper the availability of open sources information.
The Capstone team conducted interviews with trade officials, international standard- setting bodies, and industry representatives in Washington D.C. and abroad. The results have surprised and forced the team to reconsider prior assumptions regarding drivers of certain regulatory patterns. The team re-examined their research in light of this information to formulate a response to the first question.
To address the second question regarding business implications of the predicted product standards, the team examined current trade flows between TPP party members and identified specific economic ties that fell below the predict product standards integration level. The team believed that these markets will receive the greatest gains of a common trade market. For the TTIP, the team analyzed prior research conducted on the economic impact of nontariff barriers to trade. Based upon the current trade volumes, the team estimated the value of greater standards integration. Lastly, challenges associated with product standards integration were analyzed. The team believed that though product standard integration offers significant gains from trade, the difficulties of implementation will impede the realization of these gains.