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asr engineering or product standards and governmental procurement standards and

information relating to those standards from whatever sources that might be available. This data would then be provided to all those having a desire or need for it.

Section 3 would enable the Secretary to carry out the functions described in section 2 by authorizing him to make grants or contracts with any private, non-profit standards organization which he determines represents the interests

of those groups which this bill is designed to benefit and which permit participa2.1. tion in the organization by such interests.

Also he would be permitted to enter into contracts or cooperative arrangements with anyone whom he thought qualified to carry out the functions authorized under the Act. Finally, he would be authorized to establish procedures and issue rules and regulations necessary to administer the Act and carry out its designated functions. This latter authority would include the right to fix prices and set fees for the information furnished or services rendered in connection with clearinghouse activities without regard to any other law under which Government sales are permitted. Such a practice is deemed consistent with Congressional and executive policy to recover from the special users of the clearinghouse information and services, a substantial portion of the cost of obtaining and producing the data. The Secretary would be authorized to use the working capital fund of the National Bureau of Standards in administering the Act.

Section 4 of the bill would authorize appropriations, without fiscal year limitation, of such sums as may be deemed necessary for the purposes of the Act.

Section 5 requires that those who receive financial assistance under the proposed legislation keep such records as may be necessary for the purpose of audit and examination relating to the receipt and disposition of funds provided under the Act.

Mr. Roush. Our information indicates that U.S. industry has been handicapped in certain world markets by its lack of participation in international standardization activities. The United States is unique in the world in the sense that such international participation is left largely to the private sector; the governments of other nations handle these matters directly, or heavily subsidize such activities. The result has been that, while American influence in certain areas has been appreciable, it has been inadequate or nonexistent with respect to other international standards developments.

The bill before us today is designed to encourage American industry to play a more positive role in the future, and to put the U.S. Government in a position to offer a helping hand so that American products will be able to compete in world markets on a more equal basis with other nations.

This bill looks to the future. While international trade is important to the American economy today, it seems destined to grow in volume and importance in the next few years. I believe that the economic welfare of the United States is at stake, and that we should act now to remove as many artificial barriers to American exports as possible. Not only will international trade have direct effects upon the American standard of living, but nagging financial problems such as "balance of payments” will be accentuated if we don't prepare for the future.

We are particularly pleased to have with us the Honorable J. Herbert Hollomon, Assistant Secretary of Commerce for Science and Technology, who is here this morning as the main administration witness in support of this bill. Welcome, Dr. Hollomon. Would you like to start with your prepared statement at this time?

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 C.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

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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

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