Most businessmen have wondered at some point whether standards and technical regulations (also known as ‘non-tariff measures’) represent an opportunity or a trade barrier to participate on international markets.
Are these measures an obstacle? Or could they be an opportunity to adapt, improve and compete internationally? In any case, why are these regulations created? Mainly, because consumers are constantly demanding products with the highest quality and safety standards. According to the World Trade Organisation (WTO), this is defined as ‘technical barriers to trade’.
It is key to understand the main difference between a standard and a technical regulation. According to the WTO, a technical regulation is mandatory, determining the different characteristics of a product or the methods employed on its fabrication. When entering an international market, these regulations need to be fulfilled. On the other hand, standards are only voluntary recommendations. Products do not mandatorily need to fulfill these standards; yet, customers might still prefer products that do implements these recommendations of size, color, quality, etc.
As an example, some countries determine specific regulations on labels of different products: food, beverages, drugs, cosmetics, detergents, toys, among others. The European Union, Japan, Mexico, Chile and Ecuador, among others, established specific requirements on labels of products entering the country, added to other requirements such as the registration of the production plant, following specific procedures, etc.
What can Guatemalan exporting firms do? The first step is to be informed and learn all standards and regulations applicable for its products. Knowing this is key to guarantee its success on global markets. What could happen if these regulations are not met? High opportunity costs, as well as monetary losses on fines and penalties.
To help exporting companies, AGEXPORT and its Market Intelligence Unit offers advisory services, providing information on regulations and technical measures needed to be met before exporting a certain product to a specific international market.