Services Standardization: Strategic implications for Global Markets

1. Services Standardization: Strategic implications for Global Markets Presentation to ANSI CMCEC George Willingmyre January 28, 2002

2. Structure Of The Presentation • What are Services? • The GATS parallel to ATBT • The Global Standards environment • The US state of services standards activity

3. What are Services?

4. US Private Sector Gross Domestic Product by Sector 1998Total Private Sector GDP $7.7 Trillion

5. US Private Sector Employment by Sector 1999 Total Full Time Equivalent 103. 8 Million

6. US CROSS BORDER TRADE BY SECTOR 1999TOTAL TRADE VOLUME $2.2 TRILLION

7. World Service Exports by Country, 1998 Total Exports $1326.8 Billion

8. Services Trade Balances 1998 $Billions

9. Services Trade Balances 1998 $Billions (include US merchandise)

10. What are Services? North American Industry Classification System -- • 23 Construction • 44-45 Retail Trade • 48-49 Transportation and Warehousing • 51 Information • 52 Finance and Insurance • 53 Real Estate and Rental and Leasing • 54 Professional, Scientific, and Technical Services • 55 Management of Companies and Enterprises

11. What are Services? North American Industry Classification System -- • 56 Administrative and Support and Waste Management and Remediation Services • 61 Educational Services • 62 Health Care and Social Assistance • 71 Arts, Entertainment, and Recreation • 72 Accommodation and Food Services • 81 Other Services (except Public Administration) • 92 Public Administration

12. Who are Service Suppliers?…Many ANSI members you might not think IBM 2000 Annual Report “IBM … Services Lead” Second Quarter 2001 booked $16 Billion new Services Backlog…Total Services Backlog $95Billion Second Quarter 2001 Income Services $8.7 Billion Hardware $8.6 Billion

13. The GATS Parallel to ATBT

14. SECOND TRIENNIAL REVIEW OF THE OPERATION AND IMPLEMENTATION OFTHE AGREEMENT ON TECHNICAL BARRIERS TO TRADE November 2000 • The Committee noted that minimizing the use of mandatory technical regulations and utilising voluntary international standards, where appropriate, rather than preparing separate domestic standards, could reduce the regulatory burden and open-up market access opportunities. In cases where technical regulations were required, that in accordance with Article 2.4, Members were obliged to use relevant international standards or relevant parts of them as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective

15. TEXT from USTR Explanation of GATS at www.ustr.gov Why is regulation important to services? What are the major barriers to services trade? Service industries are heavily regulated. From telecommunications to finance to medicine, government regulation plays an integral role in defining the industry and determining how many firms can participate and under what terms and conditions. The ongoing waves of "deregulation" are indicative of a regulatory shift in favor of market mechanisms, but the fundamental regulatory functions endure.

16. TEXT from General Agreement on Trade in Services (GATS) with a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, the Council for Trade in Services shall, through appropriate bodies it may establish, develop any necessary disciplines … …the Member shall not apply licensing and qualification requirements and technical standards that nullify or impair such specific commitments …

17. TEXT from General Agreement on Trade in Services (GATS) In determining whether a Member is in conformity with the obligation under paragraph 5(a), account shall be taken of international standards of relevant international organizations[1] applied by that Member. [1]The term "relevant international organizations" refers to international bodies whose membership is open to the relevant bodies of at least all Members of the WTO.

18. TEXT from General Agreement on Trade in Services (GATS) Members shall work in cooperation with relevant intergovernmental and non-governmental organizations towards the establishment and adoption of common international standards and criteria for recognition and common international standards for the practice of relevant services trades and professions.

19. The Global Standards Environment

20. ISO TC Activity TC 212Clinical laboratory testing and in vitro diagnostic tests TC 215Health informatics TC 222Personal financial planning TC 223Civil defence TC 224Standardization of service activities relating to drinking water supply and sewerage - Quality criteria of the service and performance indicators CASCO JTC 1Information technology systems TC 68Banking, securities and other financial services TC 176Quality management and quality assurance TC 154Processes, data elements and documents in commerce, industry and administration TC 204Transport information and control systems

21. Background on ISO Discussions regarding Services … Consumer Policy Committee (COPOLCO) ISO COPOLCO's discussions on international standards in the services sector date to 1995 COPOLCO recommended high priority within ISO for intensive study ISO General Assembly (GA) endorsed COPOLCO's recommendation and a proposal from the ISO Secretary-General that ISO work with WTO to identify service sectors interested in undertaking ISO work.  GA approved a joint initiative with WTO for regional workshops

22. Background on ISO Discussions regarding Services … Workshops 1998. Singapore, hosted by PSB, focus on tourism: hospitality and exhibition management Argentina, hosted by IRAM, focus on banking/insurance and tourism/hotel certification France, hosted by AFNOR, focusing on a multisectoral approach (policy and concepts, success stories, opening up to international standardization) USA, hosted by ANSI, focus on engineering consultancy

23. Forum on standards for tourism • Forum on standards for financial services • Forum on standards for business and consumer services • ISO looks into standards for Corporate Social Responsibility Web site jointly sponsored by the International Organization for Standardization (ISO) and the World Trade Organization, Services Division (WTO) www.iso.ch/forums/services

24. Continuing COPOLCO interestA framework of consumer interests in the preparation of standards for services The overlap and differentiation between product and service standards Principles of Consumer participation and involvement in the development of service standards The relationship of voluntary implementation of service standards to legislation and statutory consumer protection Establishing consumer priorities in service standardisation

25. Example of European strategic Link between Legislation and CEN standards Directive 97/67/EC on common rules for the development of the internal market of Community postal Services and the improvement of quality of Service CEN shall be entrusted with drawing up technical standards applicable in the postal sector – This work shall take account of the harmonization measures adopted at international level and in particular – within the UPU

26. Current CEN work Programme in the field of Services CEN/TC 330 Qualification of Construction Enterprises™ CEN/TC 331 Postal Services™ CEN/TC 319 Maintenance™ CEN/TC 320 Transportation Services™ CEN/TC 328 Standard measuring system for cleaning performance™ CEN/TC 329 Tourism Services™

27. ICT CEN-sponsored CWAs mainly on : Technologies… Banking, Directories, Smart cards, Intelligent Transport Systems, Engineering Data Exchange Public interest Learning technologies, Cultural requirements, Design for all, Assistive technology CEN-Sponsored CWAs in support of European Legislation Electronic signatures, Personal data protection/privacy, Digital rights management, Network security

28. Other CEN Workshops Agreement Activity Description of the types of counselling and support services provided to small enterprises in Europe (FFCGEA) European Call Center standards for training and qualification (FEDMA) Management system for security Travel Agencies and Tour operators Hotel and other kinds of tourist accommodation Recreational Diving Services

29. DIN Activity beyond national participation in ISO TCs Standard Committee for Usability, Performance and Services coordination…coordination…NAGD National participation for CEN projects Application of ISO 9000 to road transport; railway transport; waste removal; public administration Funeral services Research Service-Standards for Global Markets

30. Service Standardization in the United States Overview of current activities and issues  As component of the project Service-Standards for Global Markets Supported by the German Federal Ministry for Education and Research http://www.gtwassociates.com/alerts/servicesproject.html And http://www.service-standards.com

31. Standards in the Service Sectors: An Explorative Study Commissioned by: European Commission DG Enterprise A prominent feature of the current structural change in the economy and society is the growing significance of the service sector, reflected in the growing share of services in the gross national product and employment. In line with this trend, standardisation is also extending its range beyond its traditional, technical fields to include the service sector. http://www.isi.fhg.de/ti/Projektbeschreibungen/kb-serv_stand_e.htm

32. The US state of services standards activity • What standards, specifications, regulations etc. exist in the US concerning services • 2) What standards, specifications, regulations etc. exist in the US in the following service branches? • 3) How many and which organizations, associations, institutions, companies etc. are dealing with service standardization in the US?

33. The US state of services standards activity 4) How many working groups are dealing with service standardization in the US, what subjects do they treat, and who are the members? 5) Who is responsible for the co-ordination of standardization activities? 6) What specific problems and needs do the service industry, the standardization bodies and active organizations face in the standardization of services in the US?

34. The US state of services standards activity How many and which organizations, associations, institutions, companies etc. are dealing with service standardization in the US? Data Collection in process…some within ANSI constituency, many outside eg Financial Accounting Standards Board Who is responsible for the co-ordination of standardization activities?… no horizontal broad based government or private sector organization yet views international, regional and foreign national service standards initiatives from a strategic “service industry sector” paradigm

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