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• Background
• The Standards and Conformance Framework
• Technical Requirements
  • Regulations
  • Standards
  • Measurement
  • Conformance
• Technical Requirements: Regulations; Standards; Conformance
• Technical Requirements for Export
• Case Study: Shattered Dreams

Technical requirements:

• protect users and consumers
• protect the environment
• guard against fraud
• encourage innovation
• enhance quality and competitiveness
• facilitate trade

Background

Technical requirements are now a critical issue for many businesses, particularly those in the export sector. Meeting standards or other specific requirements, and obtaining independent confirmation that you do, has become essential for business success.

In the domestic market, this means making sure that your products and services do not pose a risk to users, consumers or the environment. The trend is for business-related laws to place the responsibility for compliance squarely with business. If anything goes wrong, those supplying the goods and services are liable. Standards and conformance requirements are important aspects of managing business risk.

Standards and conformance also help build businesses. If customers know that you supply reliable and consistent products and services they will keep coming back. Customers may also have specific requirements for quality and performance. If you can prove that your product meets or exceeds these, you add value and attract premium prices. Technical competition encourages strong players to keep improving. Stringent technical standards create entry barriers to would-be competitors.

Internationally, things are more complicated. New Zealand relies on consumer protection legislation, with manufacturers being responsible for product failures. Many of our export markets, however, rely on more specific technical requirements that must be met before goods can be placed on the market.

The difficulty is that each market has different requirements. Many countries insist that you use standards and specifications that they are familiar with. Many foreign regulators require their own tests and inspections before allowing your product to be sold in their country, although this is changing as the world adopts freer trade practices.

This booklet is designed to provide an understanding of the key concepts backing the New Zealand standards and conformance technical infrastructure. It summarises the functions of providers in this field and outlines the roles of core government players. Finally, it describes the relevant mandatory and voluntary processes.

Without careful research and preparation, export profit margins can vanish overnight. Exporters need to do their technical homework before entering the market. A good understanding of New Zealand's technical infrastructure and its international relationships can only benefit your business.

The Standards and Conformance Framework

Technical Requirements

Technical requirements include regulations, standards and conformance procedures. They are either mandatory or voluntary.

Mandatory requirements are set by governments in order to protect the national interest. If your products or services do not comply, it will be illegal to sell them.

Voluntary requirements are set by customers or encouraged by industry groups. If your products or services do not comply, you risk losing the sale.

Regulations

Regulations are mandatory (legal) requirements. They are technical rules covering such things as product safety, operator/user safety, environmental effects, quarantine requirements, consumer protection, packaging and labelling, and product characteristics. A regulation may include technical specifications or it may specify use of a particular standard as a means of compliance.

Standards

National and international standards are published documents setting out agreed specifications for products, processes, performance or services - in effect, recipes. They are developed in consultation with the relevant industry and other stakeholders, e.g. consumers, regulators. Standards are voluntary but become mandatory when included in a regulation. Customers may also require that products or services meet specified standards.

Measurement

National measurement standards are accurate measures of quantities such as length, weight, volume, temperature and time. They provide benchmarks to check whether tapes, scales, flow meters, thermometers, clocks and other measuring instruments are giving correct results.

Trade measurements ensure that traders who sell goods by a measure or number - a litre of petrol, 500g of sugar, 50 vitamin tablets - are providing customers with fair and accurate quantities.

Conformance

Conformance is the process of judging whether a particular product, process or service meets a standard and/or complies with a regulation. Conformity assessment is undertaken by technical experts. Decisions are based on the results of measurements, tests, inspections or audits. Conformity assessment bodies issue reports and certificates of compliance.

The diagram above sets out New Zealand's standards and conformance framework. The following table gives examples of the relationship between regulations, standards and conformance.

Technical Requirements: Regulations; Standards; Conformance

Element / Responsibility	Description / Purpose		Example: Soft toy	Example: Butter	Example: Food processing machine
Legislation / regulation set by governments (outcome based) NB Most regulations include technical specifications and standards	protection of public health and safety environmental and security protection protection against fraud support for industry trade facilitation		Outcomes no illness, injury or death trade access	Outcomes no illness, injury or death no contamination no fraud trade access	Outcomes no illness, injury or death no fires no electrical interference no contamination of food no fraud trade access
Standards and specifications developed by standards-writing bodies, in consultation with regulators, industry and other stakeholders NB Standards are voluntary unless cited in a regulation, but can be used as a means of proving regulatory compliance. Customers may also require evidence of conformity to standards to ensure goods and services will meet their needs.	agreed specifications (recipes) for products, systems and processes agreed minimum performance requirements and examples of best practice based on international standards where possible NB Standards do not yet exist for many products, especially innovative products		fabric dyes fillings attachments (e.g. eyes, sharp items) labelling (e.g. not suitable for children under 3 years)	milkfat content water content residue levels accurate weight packaging and labelling food safety system (HACCP)	electrical safety electromagnetic interference mechanical safety pressure safety chemical safety accurate operation and timing accurate measuring equipment cleaning systems, storage etc.
Conformity assessment testing inspection certification NB certificates of product conformance or compliance are usually supported by test and/or inspection reports. Certificates of compliance can also be issued for systems, processes or services.	deciding whether the product or service conforms to a standard and/or complies with a regulation using internationally agreed assessment procedures (including test methods) and professional judgement NB Where there is no standard to check against, the process is more complex.		identification and toxicity testing of dyes testing/inspection of fillings inspection of attachments inspection of labelling Conformance decision	testing of chemical composition and residues testing of microbiological contamination inspection of packaging and labelling food safety audit (HACCP) Conformance decision	electrical testing/inspection electromagnetic testing mechanical inspection pressure vessel inspection chemical testing of components in contact with food inspection and testing of cleaning systems calibration of timing mechanisms calibration of measuring mechanisms Conformance decision
Mutual Recognition Agreements	Trade Facilitation		Acceptance of conformance decision	Acceptance of conformance decision	Acceptance of conformance decision

Technical Requirements for Export

Requirements vary from country to country. Many countries have their own technical regulations and standards, including different systems of measurement. Goods must comply with the local rules or they may not be allowed to enter the market.

This may mean repackaging for a specific market. For example, Canada insists on labels in both French and English. The United States generally operates in pounds and ounces, feet and inches, and degrees Fahrenheit. It may even mean producing a specific product line to meet local regulatory requirements. The European Union has a broad set of safety Directives (for CE marking) that must be complied with.

Conformity assessment procedures also differ. As a result, many products need to be re-tested or re-inspected at the importing country's border. The exporter usually has to pay for this, adding to the cost of the imported product. It may also result in long delays before your product gets to market.

Finding reliable information on the regulations, and the testing and inspection requirements, for a specific product in a specific market can, in itself, add to the cost of your product - and to your level of frustration.

Fortunately, growth in world trade has forced governments to consider ways to reduce these technical barriers so that goods can cross borders without unnecessary delay or added cost.

Most trading nations are members of the World Trade Organisation (WTO), or have applied to become members and are working to WTO rules. The WTO was established in 1995, following conclusion of the Uruguay Round of trade negotiations. The WTO administers the revised General Agreement on Tariffs and Trade (GATT) and the new General Agreement on Trade in Services (GATS).

WTO members have agreed to free up international trade by lowering tariffs, phasing out subsidies and quotas and reducing structural barriers. Goods that were previously banned can now enter new markets. Removal of these other barriers has exposed technical requirements as a major market access issue. In many markets, technical requirements are increasing.

The WTO administers a package of Agreements and all members must sign on to the whole package. Two of these Agreements contain rules for technical regulations or requirements set by governments.

The Agreement on Technical Barriers to Trade (the TBT Agreement) covers regulations, standards and conformance requirements for all traded products.

The Agreement on Sanitary and Phytosanitary Measures (known as the SPS Agreement) sets rules for regulating human, animal and plant health, including food safety and quarantine.

The TBT and SPS Agreements require that regulations affecting trade must be:

• Transparent - technical requirements must be published and available to any trader. Each WTO member must have national TBT and SPS Enquiry Points to provide information on technical requirements for products entering that country
• Justifiable - there must be good scientific or technical reasons for any regulation
• Non-discriminatory - products from all WTO members must be treated the same. Technical requirements for imported goods and for the same goods produced locally must be the same. (This is sometimes known as "national treatment")
• Based on international standards - where possible, all regulations should be based on international standards and guidelines. Measurements should be able to be verified against national measurement standards (traceable). Processes for checking conformance, including test methods, should also be internationally recognised

New Zealand is a full member of the WTO.

• Our TBT Enquiry Point for all non-agricultural products Standards New Zealand.
• Our SPS Enquiry Point (for agricultural products) is the Ministry of Agriculture and Forestry.

These Enquiry Points provide information on regulations and technical requirements for any products imported into New Zealand.

Exporters can find information on regulations for specific products in export markets from that country's TBT and SPS Enquiry Points. The current list of Enquiry Points, by WTO member country, is available on the WTO website. Trade New Zealand is also able to provide advice on market entry requirements.