Global Business, Standards and Change

Shaun E. Donnelly

An Interview with Shaun E. Donnelly of the U.S. Council for International Business

From the perspective of a career in diplomacy and international business, Shaun E. Donnelly talks about business, standards and the challenges of both in today's rapidly changing world.

What are the keys to and challenges of promoting U.S. business abroad?

American companies, large or small, can succeed abroad if they understand the differences in business culture. With 95 percent of the world's consumers and nearly 80 percent of the world's purchasing power outside the United States, many American companies need to succeed internationally to prosper here at home. The same attributes that enable companies to succeed in the United States are essential in international markets: quality products and services, competitive prices, quick and efficient delivery, after-sales service and follow-up, a reputation for integrity, building personal relationships and trust. But success in new international markets also will require patience, flexibility, the ability to listen and learn, a medium- and long-term outlook, and probably (again) some more patience. Standards, conformity assessment and labeling are good examples of challenges that can seem daunting in new international markets but are often issues that a serious company can work through.

How can governments support their nations' companies in a globalized environment?

Business is truly globalized, including multinational companies, global supply chains, just-in-time delivery and increased competition. Manufacturers and service providers feel increasing pressure to locate close to consumers and supply-chain partners. Governments have to keep up if they are going to be relevant in supporting, indeed championing, their companies and workers. The old-fashioned model of a single, fully integrated factory in one location, converting raw materials into finished products and shipping one standard product to the whole world, no longer fits in many sectors. With foreign investment flowing in all directions, the nationality of companies is also less clear as major companies invest around the world to drive growth and competitiveness. Governments have to learn to adapt to these new realities or risk losing ground to other nations (or other states inside a given nation).

I think standards developers face similar pressures. As companies globalize and sell their goods and services around the world, the standards embedded in those goods and services also need to be recognized and accepted around the world. Part of doing that, I believe, is that standards development processes need to be globalized, open to stakeholders around the world. I think ASTM International has done an excellent job in that regard, including using information and communications technology to facilitate remote participation and quick turnarounds in the standards development process.

How do businesses that operate internationally have different standards needs than businesses focused in the United States?

I should let international businesses address the details of that question, but my sense of the situation is that global companies, large or small, need to know that the standards they use are truly international standards, accepted in all key markets. Even long-utilized standards that fail today's global test are, I fear, doomed to decline. The future in the standards world, as in many other spheres, belongs to the globalized, to the standards and to the standards developers who understand that great technical standards without international buy-in will fail the test in today's, and tomorrow's, global marketplace.

Are there imminent international policy changes that you anticipate will affect standards development organizations?

The one constant in the world these days is change. Companies or organizations that want to succeed - indeed even to exist - going forward will have to embrace change. Technology drives change, competition drives change, consumer demand drives change. As markets and companies globalize, the pressure will grow for truly global standards that are high quality and up-to-date, market-driven and able to keep up with the times. I also predict that, as tariffs and quotas become less relevant in future trade competition, standards, technical specifications and conformity assessment measures will increasingly be the focus of trade disputes, including formal dispute settlement cases in the World Trade Organization.

Recognizing that the European Union and the United States have certain fundamental differences in their respective approaches to international standards, what would "leveling the playing field" look like in this context? What's at stake for U.S. industry and consumers?

Good question, one that's very timely with the U.S. and European Union governments in serious discussion about launching negotiations on a comprehensive trade and economic partnership, sometimes referred to as a U.S.-EU free trade agreement, or FTA. Standards will, I predict, be one of the toughest areas in any such comprehensive negotiations. Unfortunately, Europeans tend to have a Eurocentric view on what constitutes "international standards." The EU tends to accept only standards approved through the International Organization for Standardization, the International Electrotechnical Commission, and of course, the EU itself, as "international standards," while casting aside other globally respected, non-European standards developers like ASTM International.

I certainly hope our U.S. negotiators will press the EU hard on such negotiations to get to a true transatlantic level playing field regarding international standards. It won't be easy, but it is very important, not just for standards developers like ASTM International, but also for all the companies around the world who rely on those standards, or could if they were treated fairly in Europe.

Ambassador (retired) Shaun E. Donnelly, a member of the ASTM International board of directors, has served in various senior diplomatic and commercial positions in Washington and abroad during his career. He currently serves as vice president for investment and financial services at the U.S. Council for International Business in Washington, D.C. Before this position, Donnelly had been vice president for Middle East affairs at the U.S. Chamber of Commerce and senior director for international business policy at the National Association of Manufacturers, where he worked on investment policy, regulatory and standards matters, export controls, intellectual property, and customs and border issues. His diplomatic career included serving as the U.S. ambassador to Sri Lanka and to the Republic of Maldives; assistant U.S. trade representative for Europe and the Middle East; principal deputy assistant secretary of state and special negotiator for agricultural biotechnology, both in the Bureau of Economic and Business Affairs; and deputy assistant secretary of state for trade policy and programs. Donnelly has been recognized with several honors, including two Presidential Superior Service Awards, the U.S. Department of State's Career Achievement Award, a Superior Honor Award and the Cordell Hull Award for excellence in international economic policy.

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