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APEC Can Save Manufacturers And Exporters Billions

Hon Lockwood Smith
New Zealand Minister for International Trade
Co-Chair, APEC Ministerial Meeeting

"APEC has concluded an agreement that could save billions of dollars for manufacturers and exporters of electrical and electronics goods in the APEC Region," Dr Smith said today.
The Mutual Recognition Arrangement (MRA) on Conformity Assessment of Electrical and Electronic Equipment will allow an economy to accept product from another APEC economy which meets its own requirements without the need for further testing.
"Electrical goods manufacturers face substantial costs and delays through having to meet inconsistent import standards in different economies. This agreement will make market access much quicker and easier, leading to big savings for exporters," Dr Smith said.
"For products with a relatively short market life, such as leading-edge information technology products, the additional time delays associated with multiple product tests can severely impact on market penetration.
"APEC¡¦s trade in electrical and electronic products is worth around US$250 billion a year, and conformity assessment testing adds between 2 and 10 per cent to production costs.
"It¡¦s estimated that this agreement could deliver savings of around five per cent of total production costs, meaning a potential saving of up to US$12.5 billion a year for the region¡¦s exporters," Dr Smith said.
The Electrical MRA has been developed through APEC¡¦s Standards and Conformance Sub-Committee. The agreement will work at three levels, allowing all APEC economies to take part at some level, including the less-developed economies with limited product testing and quality assurance standards.
Stage One involves information exchange, so that all APEC economies can know and understand each other¡¦s regulatory systems. Stage Two provides for product testing in the country of export, with results recognised by the importing country, and stage three allows recognition of the full regulatory regime of the exporting country, including inspection and quality standards.
"Economies will be able to sign up to the agreement at different levels, depending on the current compatibility of their own regulatory regimes with those of other economies. New Zealand and some other economies are willing to participate in the near future," Dr Smith said.
"However, the sign-up process will take some time as individual economies make adjustments so that other economies can have confidence in their conformity assessment regimes. But as economies progressively sign the agreement, exporters will enjoy significant savings.
"A number of New Zealand-based electrical and electronic goods manufacturers will benefit from this agreement. Inconsistent standards and conformance costs have in the past deterred our exporters from attempting to sell into markets that might otherwise be lucrative, and this agreement provides a process for addressing these problems.
New Zealand¡¦s two-way trade in electrical and electronic equipment is worth around US$2.5 billion. A 1996 survey showed that 67 per cent of large New Zealand exporters faced standards and conformance requirements in importing countries. The costs reached $50,000 a year for individual exporters in some cases.
End
Inquiries: Ben King
Press Secretary, Hon Lockwood Smith
025 514 790
Graham Boxall
Chair, APEC Sub-Committee on Standards and Conformance
Senior Policy Officer, Ministry of Commerce
025-818-294


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