What role do standards play in supporting international trade?

Standards do far more than just help you comply with the relevant rules and regulations. They play a crucial role in facilitating international trade, supporting businesses into export markets by lowering barriers to trade.

Currently, less than a fifth of the UK’s small and medium-sized businesses export, causing a £141.3 million export shortfall – i.e. imports outweighing exports – in the UK economy, according to a 2016 report by World First. As it stands, just 5% of UK SMEs are considering exporting over the next few years, as per the World First survey.

The UK Government is actively seeking to encourage more British businesses to think globally, creating a platform – GREAT.gov.uk – which aims to inform companies of the ways in which they can begin to showcase their products to overseas buyers. Increasing exports and diversifying export markets have become increasingly important in post-Brexit UK.

Offering a passport to trade

In a recent panel at Standards Matter – an event organized by BSI, in conjunction with the CEN CENELEC General Assembly – it was suggested that standards can provide businesses with a foundation from which to seize the growth opportunities that exist in global markets.

Speakers explained how standards can act as a ‘Passport to Trade’, noting the following:

·Standards play an important role in reducing technical barriers to trade, reducing production costs and offering opportunities for economies of scale. Companies are able to access a wider number of customers globally.

 ·Harmonization of standards across countries can act as a major catalyst for trade – allowing companies to sell their products and services without the need for adaptations across multiple markets, facilitating access to markets and global supply chains.

·Using international standards is generally found to be positive for export performance.

·International standards support interoperability, reduce transaction costs and provide a signal of quality to customers, thus boosting the export potential and performance of companies[SC1] .

A 2015 BSI study, produced by Cebr, found that SMEs are 41% more likely to export if they use standards, with larger companies 36% more likely to export. Meanwhile, 85% of companies say exporting has led to a level of growth not otherwise possible, according to research quoted on GREAT.gov.uk.

At a national level, £6.1 billion of additional UK exports per year can be attributed to standards, as per BSI’s research.

What is a standard?

A standard is an agreed way of doing something. It could be about making a product, managing a process, delivering a service or supplying materials – standards can cover a huge range of activities undertaken by organizations and used by their customers.

Standards are designed for voluntary use and are the distilled wisdom of people with expertise in their subject matter and who know the needs of the organizations they represent – people such as manufacturers, sellers, buyers, customers, trade associations, users or regulators.

International standards perform a major role in fulfilling the objectives of the World Trade Organization’s Technical Barriers to Trade Agreement, to which the UK is a signatory.

Conclusion

Given the international standards organizations’ commitment to ensuring that standards promote rather than hinder trade, it is perhaps little wonder that companies that use standards tend to be more likely to export.

By using standards, companies like yours are positioning their business for the international market. International standards create a ‘common language’ for potential trading partners and prove a business’s commitment to quality.

Standards also help businesses to innovate and carve out a competitive edge, proving to importers why they need to invest in their products. The ultimate beneficiary of this increased trade is the economy – which itself is good for business, too.

To receive information on the standards relevant to your business click here.