A lack of universal standards is another problem in international sales of industrial products. The United States has two major areas of concern in this regard for the industrial goods exporter: a lack of common standards for manufacturing highly specialized equipment such as tools and computers, and the use of the inch pound or English system of measurement. Conflicting standards are encountered in test methods for materials and equipment quality control systems, and machine equipment. In the telecommunications industry, the vast differences in standards among countries create enormous problems for expansion of that industry.
Efforts are being made through international organizations to create international standards . For example the international Electro technical Commission is concerned wit standard specifications for electrical equipment for machine tools. The search has also been engaged for ways in which an international roaming umbrella can be established for wireless communications. The US Department of Commerce participates in programs to promote US standards and is active in the development of the global harmonization task Force, an international effort to harmonize standards for several industry sectors. The US Trade Representative participates in negotiations to harmonize standards as well. Recently a key agreement was signed with the European Union to mutually recognize one another’s standards in six sectors. The agreements will eliminate the need for double testing (once each on both sides of the Atlantic) and address inspection or certificate in telecommunication medical electro magnetic compatibility, electrical safety, recreation craft and pharmaceuticals. The agreement cover approximately $50 billion in two way trade and are expected in equate to a 2 percent to 3 percent drop in tariff.
In addition to industry and international organizations setting standards countries often have standards fro products entering their markets. Saudi Arabia has been working on setting standards for everything from light bulbs to lemon juice, and it has asked its trading for help. The standards the first in Arabic will most likely be adopted by the entire Arab world. Most countries sent representatives to participate in the standard setting. For example, New Zealand sent a representative to help write the standards for the shelf life of lamb. Unfortunately, the United States failed to send representative until late in the discussions and thus many of the hundreds of standards written in favor Japanese and European products. Also, Saudi Arabia adopted the new European standard for utility equipment. The cost in lost sales to two Saudi cities by just one US company. Westinghouse was form $15 million to $20 million for US standard distribution transformers. Increasingly American firms are waking up to the necessity of participating in such standard discussions early on.
In the United States conversion to the metric system and acceptance of international standards has been slow. Congress and industry have dragged their feet for fear conversion would be too costly. But the cost will come from not adopting the metric system the general electric company has a shipment of electrical goods turned back from a Saudi port because its connecting cords were six feet long instead of the required standard of two meters.
As foreign customers on the metric system account for more and more American industrial sales, the cost of delaying standardization mounts. Measurement sensitive products account for one half to two thirds of US exports and if the European union bars non-metric imports as expected many US products will lose access to that market just as the European Union is on the threshold of major economic expansion. About half of US exports are covered by the EU’s new standards program.
To spur US industry into action, the Department of Commerce indicated that accepting the metric system will not be mandatory unless you want to sell something to the US government all US government purchases will be conducted exclusively in metric. All federal buildings are now being designed with metric specifications, and highway construction funded by Washington uses metric units. Because the US government is the nation’s largest customer, this directive may be successful in converting US business to the metric system . The Defense Department now requires metric specifications for all new weapons systems as well.
Despite the edicts from Washington the national Aeronautics and Space Administration (NASA), which presides over some of the most advanced technology in the world, resists metrification . The $100 billion plus space station contains some metric parts, but most of the major components are made in the US and are based on inches and pounds. NASA’s excuse was that it as too far into the design and production to switch. Unfortunately the space station is supposed to be an international effort with Russia as one of the partners, and this decision created large problems for systems integration. Worse yet, the cause of the 1999 failure of the $125 million Mars Climate Orbiter was a mix up between metric ad English measurement systems. It is hard to believe that the only two countries not officially on the metric system are Myanmar and the US. It is becoming increasingly evident that the US must change or be left behind.