STATEMENT OF J. HERBERT HOLLOMON, ASSISTANT SECRETARY OF COMMERCE FOR SCIENCE AND TECHNOLOGY; ACCOMPANIED BY GORDON A. CHRISTENSON, ASSISTANT GENERAL COUNSEL FOR SCIENCE AND TECHNOLOGY, DEPARTMENT OF COMMERCE, AND GEORGE GORDON, NATIONAL BUREAU OF STANDARDS

Dr. HOLLOMON. Thank you very much, Mr. Chairman. It is a pleasure to be here. I would like to introduce on my left Mr. Gordon A. Christenson, Assistant General Counsel for Science and Technology, Department of Commerce. Also with us is Dr. George Gordon of the National Bureau of Standards.

I also want to express to you Dr. Astin's regret at not being at this table. He has participated in the development of this legislation. He is, on the other hand, currently in Europe and in Czechoslovakia to help develop the very subject that we are talking about this morning.

Mr. ROUSH. We welcome you two gentlemen here this morning. I am especially pleased to see that our distinguished chairman, Congressman Miller, chairman of the full committee is with us.

Chairman Miller, do you have any remarks that you would like to make at this time before we proceed to hear this testimony?

Chairman MILLER. I am very happy to spend a few minutes with you this morning. It is always a pleasure to see Dr. Hollomon. Dr. HOLLOMON. Thank you very much.

Mr. ROUSH. You may proceed.

Dr. HOLLOMON. It is a pleasure to be here today in support of the proposed legislation, H.R. 17424 and H.R. 17598, which are identical bills for the promotion and support of effective representation of U.S. interests in the voluntary international standards process. The legislation also would provide for standards information services through which producers, distributors, users, consumers, and the general public could obtain information on all types of engineering and commodity standards and standardization activities.

Standards are the language of commerce. They are the means by which the needs of the user are expressed. They are also the means by which the design or the performance of products which are offered for sale are specified. Standards provide the basis for mass production and for the interchangeability of parts. They permit decentralization of production facilities. They can stimulate or stifle competition. They can stimulate or stifle innovation. They can reduce or increase the barriers to exchanging goods or services across national boundaries. Through this legislation, we believe such barriers can be reduced and better use made of voluntary standards.

In the United States, the development of commodity or engineering standards except in certain special cases of health, safety, or public welfare, is a voluntary cooperative process involving producers and users. The process operates largely through mechanisms provided by technical societies and trade organizations. It may also operate through the voluntary procedures of the Department of Commerce. Although there are problems and inadequacies with this system, particularly with respect to coordination, by and large, enlightened selfinterest on the part of the participants seems to assure its adequate functioning.

In the case of international standards, however, the situation is different. There seems to be insufficient awareness of their importance to producers in this country and of their importance to our national interest in assuring an adequate level of U.S. participation in the standards development process.

The establishment of international standards occurs principally through activities carried on by such groups as the Organization for International Standardization (ISO), the International Electrotechnical Commission (IEC), and the Pan American Standards Commission (COPANT). These groups are not treaty organizations. They were organized by the appropriate standards organizations in each of the countries represented. The United States of America Standards Institute (USASI), known until several weeks ago as the American Standards Association (ASA), has been the private body representing many technical societies and the producers and users of nationally recognized standards in this country. This body enlists the technical assistance of both industry and Government in its international committee activities.

International standards are two-edged swords; if they are compatible with standards in use in the United States, they permit access of American products to world markets and of foreign products to our markets. They can reduce barriers to exchanging goods and services.

If, on the other hand, international standards are not compatible with U.S. standards, the products of American manufacturers may in effect be excluded from world markets because the barriers to exchange are increased.

Similarly, products from other countries could be excluded by unnecessary barriers. The United States cannot be indifferent to the consequences of incompatible standards. There are numerous examples where these barriers have applied to U.S. products in foreign

markets.

We believe it is a desirable goal to reduce artificial and unnecessary barriers to the exchange of goods and services. The interdependence of producers and users throughout the world requires harmony of exchange. The successful competition of U.S. products in world markets is essential to both the domestic economy and to our international balance of payments. A continued favorable balance of trade can stimulate the full use of our productive capacity and keep employment levels high. These are prerequisites for the rate of economic growth which we need in order to achieve our national goals.

The United States does not ask for preferential treatment in standardization matters. It does not expect all other countries to adopt our standards simply because doing so will favor our products in the foreign markets. But neither should we hesitate to provide adequate participating in the international process by which standards of various countries are harmonized. The access to markets for American products in the highly industrialized countries, as well as those emerging in less-developed countries, will increasingly depend on harmonized technical standards. Under the principle of consensus, our policy should be to participate as fully as possible with all interests concerned in the international standards process.

National technical standards tend to give a country's domestic producers a distinct advantage over foreign producers when there are incompatible standards. Some have considered the problem as a nontariff barrier requiring government-to-government negotiation and we would not wish to exclude that as a possibility. However, the more immediate and constructive approach, which forms the basis for this legislation, is for the United States to participate more actively within international standards groups for the goal of international harmonization of technical standards.

The importance of the work of those groups has long been recognized in Europe. They have made much progress over the years toward more global agreements beyond just the harmonization of the standards of European countries. Yet despite these compelling reasons for more active U.S. participation in international standardization activities, there is general agreement that we have not participated in work on international standards at a level nearly commensurate with our interests and capabilities. The situation is perfectly understandable. The international standards groups are used by other countries to achieve mutual compatibility of technical standards among themselves, but not sufficiently with technical standards in the United States.

At this point it will be helpful to give an example. Recently, an ISO standard on hermetically sealed cans has been adopted which will have an adverse impact on exporters of American canned goods. The ISO recommendation is essentially a German standard and requires can sizes, contents, and labels different from those in common use in the United States which were compatible in most of the world markets. Trade in this world market will now require U.S. exporters to absorb the additional expense of using different can sizes, contents, and labels. Clearly this increased cost puts the American product at a disadvantage in the competition with products from countries in which the national standards are in keeping with the recently adopted international standards. Yet the ISO technical committee which was formed to develop this standard, issued a carte blanche invitation to U.S. interests to draft an appropriate standard for these markets. The United States did not participate.

An example of appropriate U.S. participation is in the standards for paper dielectric capacitors. Paper dielectric capacitors of all construction are major items of electronic components exported from the United States. Annual trade of these components has been shown to be in the tens of millions of dollars.

When an IEC standard on this type of capacitor was proposed, the European practice of life testing such capacitors at maximum temperature and at maximum rated voltage was insisted upon by European delegations. The methods of production and standardization of these capacitors in the United States, however, were not adaptable to testing under the foreign practice.

To remedy this problem, a committee of experts in this field in the United States undertook a scientific study of the history and performance and test experience of such capacitors based on U.S. practice and presented this report to IEC Committee in 1956. The methods and practices recommended in the report were accepted and included in the revised IEC publication. The savings to our capacitor industry and

new test equipment and facilities is estimated at several million dollars. It is just this kind of standards activity we wish to support for commodities in which we have or may have an international interest. Standardization is most important when there is rapidly developing technology. There is a national interest in seeing to it that when manufacturers are entering new, competitive domestic markets and are not yet concerned with future world markets, they are not excluded from those markets because there was inadequate participating in the standards process. In the early stages of a rapidly developing technology, it is not clear which producers will be interested enough to finance the United States participating in the international standards process. Yet standards set early could set the future pattern for product development and affect markets.

Let me further illustrate the problem by describing the extent of United States participating in some of the international groups. Through USASI membership in ISO, the United States is listed as participating in only 75 of 118 ISO technical committees. The key to developing compatible international standards is of course the committee staff which devotes the major attention to the work through secretariats. Compared with the other highly industrialized member nations, the United States has not contributed to the effort in proper relation to its industrial activity by accepting secretariats. Of the 118 technical committees, the United States holds the secretariat for only 10. In contrast, the United Kingdom holds 25; France holds 18; Netherlands, Germany, and Belgium hold 9, 8, and 7 secretariats, respectively. Even when we do participate the delegation is not always adequately financed, staffed, or representative of all interests that may be concerned. Frequently, convenience rather than technical competence determines our participation.

The reasons underlying this relative lack of interest in international standards activities are not difficult to discern. Principal among them, as I have pointed out, is the lack of motive to invest in standards for markets that may never exist. Also, there are inadequate mechanisms for financing national delegations secretariats. There is little continuity of representation and the costs are not borne equitably among these who benefit-including the general public.

If, at the time of development of an international standard the major market for the particular item concerned is domestic, then there may be little interest among American companies in participating in international standardization. Sometimes there arises a popular misconception that since national standards are often "tougher" than international standards for the same item, there is nothing to worry about-the item will conform.

The argument can and perhaps will be made that if international standards were really as important to business as we say, then American business would be doing a better job of representing its interests in these activities. Why should the Federal Government now be concerned to the point that this legislation is desirable? The answer is that the national interest is greater than that of any one business. The health of our international trade, our balance-of-payments position, the concern about unnecessary international conflicts for those wishing to compete for markets, and the goals of promoting healthy markets are public matters. It is the responsibility of the Federal

Government to anticipate long-range problems and take actions, such as those proposed in this legislation, to promote and protect that national interest-and wherever possible through the voluntary process. In the proposed legislation, the Secretary of Commerce is authorized in cooperation with private groups and Federal and State agencies to promote and improve U.S. participation in the international standards process. In exercising this responsibility, he may make grants or contracts with organizations or bodies which he determines are qualified to promote, develop, support, or improve United States participating in international standardization activities. Inherent in the term "qualified," as applied to organizations or bodies through which as specific industry might be represented, is that there should be adequate procedures, based on the consensus principle, to permit participation in the organization by producers, distributors, users, and consumers within the industry. The Secretary is not limited to providing financial support for these activities, but is authorized to use the full powers of his office to accomplish the purposes of this act. He may wish, for example, to send experts to other countries having inadequate standards institutions to give them advice and technical help.

The proposed legislation has a second major purpose. It will provide the means by which producers, distributors, users, consumers, and the general public can obtain full information about standards and standards activities. This service would have as its purpose the collection and dissemination of information on engineering, product,. or procurement standards from all sources. It will tell where copies can be obtained and who is developing standards. It will provide information to businesses and consumers who do not know where to turn for information on standards. Three major sources for this information exist. There are Government standards (Federal and State procurement standards and specifications, for example), voluntary standards of U.S. industry and international and foreign standards. The act would authorize the collection, translation, cataloging, classification, coordination, and integration of all this standards and related information. There are no present ways for either a producer or consumer to obtain all this information, and there is no indication that it cannot be done without special support.

To anyone who has been active in the standardization process, either domestic or international, it is obvious that there is inadequate communication among the many organizations and agencies that generate or issue standards of the businesses and persons needing to use them. There are communications barriers not only in the way of conveying the content and meaning of a standard, but also in the way of obtaining information back from the users of the standards to aid in improving them.

All standards-producing bodies have developed some way of publishing and distributing information concerning their standards. There are many such systems, and they are far from uniform. There are differences among these systems in terms of nomenclature, format, and classification of subject matter, and there is a lack of modern data and information retrieval systems. There are no adequate translation services for foreign standards. All of these lead to widespread difficulty in locating, understanding, and applying standards to current erations. Indeed, Government and industry frequently find it diffi