Since the formation of the World Trade Organization (WTO) in 1995, U.S. and European officials have accelerated transatlantic efforts to develop and apply three important trade promotion devices: harmonization, equivalence, and mutual recognition (MR). Their goal has been to reduce what industry considers to be technical barriers to trade posed by national regulatory requirements. WTO agreements governing trade in food and other products specifically instructs nations to engage in these efforts. Because of their potential to reduce costs to industry, these trade facilitation tools have been promoted heavily by industry groupings such as the Transatlantic Business Dialogue (TABD). TABD is a coalition of major U.S.- and EU-based corporations that dominate transatlantic trade in goods and services.
The three trade promotion mechanisms are closely related but are not interchangeable. Harmonization and equivalence are both methods for bringing about regulatory convergence or uniformity. Harmonization takes two differing standards or procedures and converts them into one. Equivalence allows two differing standards or procedures to remain intact but treats them as if they were the same because in theory at least they produce the same or similar results.
Mutual recognition, however, is different. With respect to consumer products, MRAs are agreements between countries to recognize and accept the results of conformity assessments performed by conformity assessment bodies (CABs) of the countries that are parties to the agreement. Conformity assessment is the process by which products are measured against the various technical, safety, purity, and quality standards that governments impose on products. The basis of this mutual recognition is the use of the importing country's tests and standards. Such MRAs allow an exporting country's CABs to use the tests and standards of the importing country in evaluating products, thereby potentially reducing the number of CABs that must evaluate a product destined for multiple markets. In 1998, the U.S. negotiated a far reaching MRA with the European union covering six product areas: telecommunications equipment, electromagnetic compatibility, electrical safety, recreational craft, pharmaceutical good manufacturing practices, and medical devices.
For more information, see the Trans Atlantic Consumer Dialogue's Background Paper on Mutual Recognition Agreements.