but not least, is the continuing deficit in the international payments account of the United States, which a higher level of American exports can help to reduce. The need for using United States Government funds to encourage the participation of private non-profit organizations in international standards activities arises from insufficient participation of United States interests in the development of international standards. One explanation of the lack of support is a failure of the business community to recognize the potential effects-both good and bad— of standards on trade opportunities, a neglect which may be due to the fact that exports frequently constitute a relatively small portion of the business of many domestic producers. By contributing to American organizations participating in international standards work, the Government can demonstrate to the business community the economic benefits of standardization and encourage it to increase its financial support of and participation in international standards work. The Department suggests that the legislative history of the bill recognize the primary responsibility of the Secretary of State for initiating and implementing foreign policies, and express the intent that the standards activities of United States interests promoted and supported by the Act be consistent with the trade and foreign policy objectives of this country. The Department also considers that United States organizations receiving public funds under the Act (1) should work for the adoption of standards which will reflect a balanced consensus of all groups affected-producers, distributors, users and consumers; and (2) should urge upon international standards conferences the desirability that participating organizations representing other countries also reflect the general consensus of all their domestic interests. This point is important both to protect affected domestic interests and to assure that the standardizing process does not operate to restrain international trade. It understands that the Secretary of Commerce, in establishing the policies, criteria, and procedures and in prescribing the rules and regulations referred to in Section 3(c) will define the means by which he shall determine, as required by Section 3 (a), if a private, nonprofit standards organization or body represents the general interest and has established adequate procedures to this end. It also understands that private United States organizations receiving grants will be available to consult with appropriate United States Government agencies prior to participating in international standards-making activities. Observance of the consensus principle as described above would discourage formulation of standards which would control or limit production, set prices, or otherwise create restraints on trade. The Department believes that development of international standards will bring economic benefits to the United States and to all trading countries. Competent standards will reduce production, inventory, and distribution costs and simplify installation and use of complex machinery and other products. They will also facilitate establishment of industries in developing countries and direct production toward the most efficient producers. American participation in such efforts is in accord with this country's non-restrictive trade policies and with the liberalized trading environment that is the goal of the Kennedy Round of trade negotiations. The Bureau of the Budget advises that from the standpoint of the Administration's program there is no objection to the submission of this statement. Sincerely yours, DOUGLAS MACARTHUR II, Assistant Secretary for Congressional Relations. EXECUTIVE OFFICE OF THE PRESIDENT, Hon. GEORGE P. MILLER, Chairman, House Committee on Science and Astronautics, DEAR MR. MILLER: In response to an invitation from your staff, I am pleased to provide the attached statement of my views in support of HR 17424 and HR 17598. Sincerely, DONALD F. HORNIG, Director. STATEMENT OF DR. DONALD F. HORNIG, DIRECTOR, OFFICE OF SCIENCE AND TECHNOLOGY Mr. Chairman and members of the committee, the legislation under discussion is important to the long term economic growth and well-being of the United States. Improved communication and transportation facilities have brought the inhabitants of the globe ever closer together. Business transactions are becoming less and less constrained by national boundaries. Countries participating in the international market receive benefits because resources can be allocated to those productive activities at which the country excels, with consequent increases in economic efficiency. It is appropriate for all countries engaged in international commerce to search out and overcome obstacles to the ready movement of goods. Most developed countries became actively involved in the establishment and improvement of international standards long ago, because it was clearly understood that products sold must be designed and constructed in a fashion so as to be compatible with the environment at the point of use. This has been less true in the United States than in many other developed countries, because we were fortunate in having a large national market to which most productive energies were directed. But now the United States has a great stake in international trade. Unless we maintain or expand our trade surplus, we will incur a gold outflow which could weaken our currency. In order to avoid such a development it will be necessary to stimulate the export of the goods which will bring the most substantial profits-high technology products. And it is in this realm that the inadequacies of existing international standards are most evident. It is therefore in the interest of the U.S. to encourage the preparation, adoption and wide use of improved international standards. The proper development and use of voluntary standards are an essential step in assuring that the private and public investment in science and technology is efficiently utilized. I believe it fitting and proper that the Federal Government contribute both financial and technical support to organizations which participate effectively in international standardization activities. Contribution by Government is necessary because of the long lead time required to study and negotiate prior to the adoption of any standard, and because the benefits of standardization are widely diffused throughout the country. Standards must be used to be effective. Standards are regularly changed and extended. As products become more technologically sophisticated and complex, standards must be refined. The typical industrialist, designer, or market analyst must have ready access to current standards and related technical information. Few firms are able to maintain a fully adequate library of standards for their regular business. And most, if not all, are handicapped by incomplete or obsolete standards information when attempting to explore a new market overseas or design a new product line. There exists an unmet need for a clearinghouse which would maintain a library of standards and government specifications and provide associated services to standards users. The bills before the Committee, HR 17424 and HR 17598, offer an opportunity to repair these inadequacies. I strongly support their passage. EXECUTIVE OFFICE OF THE PRESIDENT, Mr. FRANK R. HAMMILL, PRESIDENT'S COMMITTEE ON CONSUMER INTERESTS, Committee on Science and Astronautics, House of Representatives, Washington, D.C. DEAR MR. HAMMILL: Thank you for asking our views on HR 17424. In the interest of American consumers, I recommend that this Committee act favorably on HR 17424, and I urge its prompt enactment. This bill would promote and support representation of United States interests in voluntary international commercial standards activities and would authorize the establishment of a clearing house for information on commercial and procurement standards. It would clarify the authority of the Department of Commerce so that its National Bureau of Standards could provide much needed stimulus and leadership in the field of standards in which it is now technically and scientifically preeminent. I believe that such legislation is long overdue, and that a vigorous effort to improve and expand standards is badly needed. This bill would be one step in this direction. My special interest is in the consumer aspects of this proposed legislation, in my capacity as Special Assistant to the President for Consumer Affairs. In my opinion, American consumers should benefit materially from expanded international and domestic standards activities for consumer goods. First, greater use of standards would improve the quality of imports as well as domestic merchandise. American industry and labor should also benefit from larger exports which would be made possible by widening foreign markets through more standardization of parts and equipment and the establishment of standards of quality and performance. Second, a comprehensive, effective clearing house system for information on existing product standards, domestic and foreign, does not now exist in the United States. It is badly needed. With such a system, producers, retailers and consumers could make much wider use of the invaluable standards programs already developed, and the performance and quality of American products would be improved. Before discussing the specific merits of this proposal, we should be clear about the terms "standards activities" and "standardization." "Standardization" does not mean dead-level uniformity. Rather, standards provide an orderly framework of sizes or weights or measures, or speeds, or power, or other performance characteristics which all producers can use in design and production and which buyers can use as a guide to their purchases. Standardization reduces proliferation, and standards provide common definitions. Some well known examples of standards include wood screws and nails which are sold in standard sizes; electric outlets and electric plugs in uniform sizes; cans for fruits and vegetables which are made in a few recognized sizes worked out by industry. This kind of "standardization" is the very essence of the American productive genius. It is fundamental to our mass production and mass marketing system by which products are made available to millions of people at moderate costs. It is also fundamental to the enormous business of repairs and replacement of parts. "Standards" may take the form of a definition or formula for the contents, like aspirin; or they may relate to a type of construction-e.g., sewed or cemented shoe soles; or they may describe performance, such as the weight which a ladder will hold or the mileage a tire of given thickness will run under certain conditions. Usually the standard contains a procedure for testing for conformity. These standards describe qualities which enable buyers to judge whether a product will meet their needs and enable them to buy with more confidence. Each standard or group of standards is unique because the products it covers are different from those of other industries. Standards for each industry and group of products must therefore be dealt with separately. The task of developing standards is technical, difficult, and continuous because products are constantly changing. Most of the standards in use today are highly technical engineering standards relating to materials and parts. Consumers are not usually aware of them, but nevertheless they benefit from them. When standards are widely recognized and used, they improve the quality of performance of goods all along the line, and the consumer is at the end of the line. But today there are all too few consumer goods standards. that this bill will promote their development and use. It is my hope Turning now to the specific provisions of the bill, I wish first to discuss the proposed clearing house service. I strongly support this proposal. Section 1(b) of HR 17424 provides that the Secretary of Commerce, in cooperation with private organizations, would “establish and maintain a clearing house service for the benefit of producers, distributors, users, consumers and the general public for the collection and dissemination of engineering or product standards and Federal, State or local procurement standards and information pertaining to such standards from whatever sources, foreign and domestic, that may be available...." This program would utilize existing libraries and collections of standards information, since Section 3 gives the Secretary authority to make grants and enter into contracts with private non-profit organizations to carry out this and other provisions of the bill. In my opinion, leadership by the Department of Commerce and Federal financial support are essential in information and standards is to be accurately catalogued and widely disseminated so that it can be more generally used. The fact is that there is no such organized system of information on standards in the United States today. Not even the Federal Government has a single complete list of its own standards, or any one place to which an inquirer can go to find them. Last year, I asked for a comprehensive list of consumer goods standards or consumer procurement specifications and found it simply did not exist. In response to the request of the President's Committee on Consumer Interests, the Department of Commerce convened an interagency committee-including such standards-making agencies as the Department of Agriculture and the Food and Drug Administration, GSA and Defense Procurement, to look into the availability of this information. It proved to be a huge undertaking. That Committee strongly recommended the establishment of a clearing house which the Department of Commerce would maintain through its National Bureau of Standards including a clearing house for Federal standards information. The United States Government has established many standards, especially where public health and safety are concerned-for foods, drugs, insecticides and pesticides, and, just this year, for automobiles and tires. These standards are all published, but one must search to find them. The Federal Government also has a vast body of procurement specifications developed for the tens of thousands of products it buys, both civilian and military. They provide a useful guide which industry could use as a starting point for development of voluntary standards. In fact, many manufacturers now produce goods to these specifications since the Federal Government is such a major customer. It pays industry to adapt their designs and machinery at least to meet these minimum specifications, which are so carefully developed. The Department of Defense, the General Services Administration and other procurement agencies publish excellent directories of these specifications, but again, one must search hard, for example, to find consumer type product standards. However, most “standards" in the United States are voluntary standards which originate in private industry. They would constitute the bulk of the standards in any clearing house. They are developed by experts, usually under industry auspices. After producers and users have come to a consensus and agree upon a standard by suitable procedures, it can be issued as a universal standard by an appropriate national standardizing body. But again, each standards organization issues its own publications and maintains its own library. It is most important that this excellent, but scattered, information, be pulled together in a well coordinated clearing house system. Modern data retrieval systems should be installed so that inquiries can be answered promptly and efficiently. Private and public agencies should combine resources in this effort. From the consumer's point of view, such a clearing house would provide our first really comprehensive, definitive survey of standards for consumer goods and point up the gaps where standards activities need to be initiated. We now know some of these gaps, but I am sure that there must be others of which we are unaware. Most important of all, of course, is the fact that if information on standards is readily available, it will be more generally used. The more it is used by producers and distributors and consumers, the better our products will be, and the better consumers will be served. The second major provision of this bill (Sec. 2(a)) relates to international standards activities. Here again, I believe that it is most important that the Secretary of Commerce provide leadership to assure adequate U.S. representation in this field, in which other countries are moving so rapidly. The United States early became the world leader in the development of volun. tary commercial standards, through the efforts of American business and industry and the Bureau of Standards, stimulated and organized by the late President Hoover. In recent years, however, our position in the international picture has gradually eroded because of lack of leadership in the organization and financing of a comprehensive effort in international standards-making activities. It is most desirable that the Secretary of Commerce, in cooperation with private standards making bodies, should now actively undertake this function, as this bill authorizes him to do. In my travels in other countries, I have observed that every major industrial nation in the world has a standards making activity which is either government financed or Government-assisted and which makes certain that its country's industries are properly represented in the field of international commercial standards. In the United States, on the other hand, we have not spoken with one voice. Moreover, we have actually been absent from the council tables on more than one occasion when other countries met to agree on product standards. It is essential to protect the interest of American consumers at home and American exporters that the United States be fully represented in these councils, particularly when new materials and products, new proposals for packaging and transportation standards are being developed. The American Standards Association, now known as the United States of America Standards Institute, has represented the United States with respect to some products, but in others there has been little or no representation. One of the principal reasons for urging the passage of this legislation is to assure better quality and greater standardization of imports into the United States. The post-war surge of production in Europe and Japan, turned out by new plants with the most modern equipment has brought a flood of new merchandise into world trade and a flood of imports into the United States. Many of these imports are inexpensive consumer goods which undersell American products. In some cases domestic production is being displaced. Some of this imported merchandise is of good quality, and if it is, buyers should know, for we need good inexpensive goods for sale here. But some of it is shoddy, or poor quality. The buyer can only rely on the retailer, or buy and try. In the long run, the only assurance of quality lies in agreed upon international standards, which exporters in other countries would observe. If, for example, American retailers knew that a given line of portable radios, or other electronics equipment, met an international standard, they could buy with more certainty and so could consumers. Standards for consumers' goods are now receiving more attention, both here and abroad-but as yet there are too few of them. We hope there will be more. It would be a great gain for consumers if there were international standards for major consumer goods, that move in international trade-such as textiles, electronics, appliances, watches, etc. Our U.S. export business would also benefit greatly. But the important forward step for which this bill provides is adequate U.S. representation whenever international commercial standards are under discussion. This is needed whether the standards are for materials or parts or producers or consumers' goods or packaging. The United States must not be left out. If we are at present represented by our experts from industry, government, and professional organizations, we can contribute to these standards, and all countries should benefit. For these reasons, I urge that this Committee take favorable action on HR 17424. Sincerely, ESTHER PETERSON, Special Assistant to the President for Consumer Affairs. |