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Advocacy - [2022] ICT Product Safety Regulations and their Impact on the Ease of Doing Business

[2022] ICT Product Safety Regulations and their Impact on the Ease of Doing Business

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The Information Technology Industry Council (ITI)'s 2022 Global Benchmark Report, ICT Product Safety Regulations and their Impact on the Ease of Doing Business assesses the impact of international product safety regulatory practices that affect information and communications technology (ICT) products. This report recommends positive steps for governments to identify, prevent, and reduce impediments to trade, manufacturing, and supply chain operations. With inspiration from the World Bank’s annual Doing Business Report, ITI has scored 40 countries and the European Union (EU) according to how their product safety regulations for ICT equipment impact the ease of doing business for manufacturers seeking to import and sell their products in these markets.

Key Findings

  • In the broad category, the United Kingdom (UK) scored 28 points due to their commitment to transparency and public participation in the regulatory process and commitment to harmonization in the global regulatory landscape.
  • With a total score of 6 points, Mexico ranks last in the broad scope countries, down from 11 points in our 2020 report. Mexico’s poor score is mainly due to limited global stakeholder involvement, unfavorable changes in scope of regulated equipment, and no longer accepting foreign test reports.
  • Among the 12 countries evaluated that impose safety requirements for a narrow scope of IT equipment (for example, AC adapters or power cords only), Ecuador, Hong Kong, and Singapore led with perfect scores of 30, while Indonesia ranked the lowest with only 10 points.

ITI compared the scores tallied in this 2022 Ease of Doing Business report with those in our 2020 report:

  • Although India’s score remained the same, ease of doing business has been hampered in the country by the intent of multiple agencies to regulate the same products, leading to duplicative certifications.
  • Argentina’s score improved because of their commitment to stakeholder consultation and ease of doing business in their recent safety regulation rulemaking efforts.
  • Uganda’s score in the past matched other highly-scored nations in Africa but has decreased in this report because of their proposed marking, import clearance, and market surveillance regulations that would impose more costs and regulatory burden without commensurate benefits.
  • In the narrow category, Thailand’s score decreased significantly due to their use of tariff codes to defined regulatory scopes, which causes confusion and delay at ports of entry, and the government’s lack of response to stakeholder concerns about this and other crucial issues.
  • Indonesia debuted in our report with only 10 points due to very low scores in transparency, avoiding obstacles, predictability, and surveillance.
  • Chile’s score improved because their updated regulatory scheme minimizes impacts enhancing surveillance activities and accepting foreign test reports.

ITI concludes that the ease of doing business in most countries could be greatly improved by following good regulatory practices, including early and transparent notification of measures that stand to impact trade, reliance on international standards and acceptance of international test reports (including through reliance on proven international accreditation and testing schemes), participation in mutual recognition agreements (MRAs), adequate transition times, risk-based approaches to regulation and conformity assessment, and avoidance of unjustified impediments that impact trade, manufacturing, and supply chain operations. Before drafting regulatory measures, ITI recommends that government agencies assess their role in facilitating innovation and global access to ICT goods and connected services. Countries should have a sense of their place in the global community and marketplace and thus try to harmonize with other international standards and practices, avoiding divergence that could lead to a fragmented regulatory landscape. To the extent that a country or region’s regulatory approach(es) lead to such fragmentation, there is a risk not only of detrimental impact to trade and access to digital services, but also of technical disruption (i.e., impact on the ability of firms to deliver optimal and secure goods and services), which fall most heavily on small- and medium-sized service providers (SMEs). ITI and its members have decades of experience addressing these challenges around the world, and we invite governments contemplating regulatory schemes to contact us to set up a public-private dialogue that leads to the most effective and efficient regulatory schemes.

ITI recommends the following guiding principles for governments considering a new regulation:

  • Foremost, establish a clear and objective safety goal that can best be achieved through regulation.
  • Assess and seek to minimize the impact of the regulatory measure on both market access and on the manufacturers and importers that are subject to the regulation.
  • Encourage investment and the creation of an open environment for innovative and new technologies and foster competition among the players in the sector, all of which have the desired effect to improveconsumer choice and lower costs.
  • Assess and seek to lower non-tariff trade barriers that intentionally or unintentionally arise from safety regulations and associated conformity assessment requirements.

Drawing from the WTO TBT Agreement, which governs the process by which countries enact technical regulations, ITI provides industry recommendations for national policymakers to improve their scores while still achieving their public policy and safety objectives. With many countries planning to transition to a new international safety standard for ICT equipment in the coming months and years, following these steps may be essential to prevent further growth in non-tariff trade barriers (NTBs) resulting from unnecessarily complex and burdensome requirements.