International Trade in Services.pdf - DSpace at Khazar University

Building Empires Overseas 209
local companies to international standards and good practice in building codes,
the companies become more well equipped to compete in foreign markets in
which the same standards, codes, and so on are employed.
Yet, importing wholesale standards from abroad does not necessarily bring any
benefits. Standards need to suit the local environment, and regional cooperation
may well be the most useful way forward. In addition, in countries with limited
government capacity, it makes sense to invest effort in harmonizing or reforming
standards if they are likely to be implemented or followed by the sector. Policy
makers should therefore consult with construction companies and other interest
groups about the usefulness of prospective reforms to standards and building
codes. It is also important to recognize the risk in poorly governed countries
that government agencies with power to inspect and enforce sometimes unclear
regulations may simply undertake rent-seeking activities that produce additional
challenges rather than reducing transaction costs and raising quality and safety
standards. For example, the World Bank (2007) reports on a Chinese construction
company that pays an annual fee of US$20,000 for a license to operate in
Tanzania. Whatever the value of the certification, the fee will always be covered by
the Tanzanian clients.
The willingness to adapt the local sector to international good practice will
eventually lead beyond product standards and building codes. For example, in
Mauritius, local policy makers have sought to implement international standards
and to support the development of new standards in areas such as registration,
licensing and certification, procurement policies, liability, and copyrights (UNCTAD
2000b). The strong links between construction services and professional services
such as engineering and architectural services may also convince policy makers,
particularly policy makers in middle-income countries, to take a broader view of
the issues, such as the problems associated with the nonrecognition of qualifications
for foreign professionals, which creates difficulties in importing and exporting
countries.
The institutions that are most well suited to address these issues and that
can help upgrade local capacity are domestic or regional industry associations
and standards bodies. Such institutions should promote the progressive
implementation of international standards and building codes whenever these are
applicable to the domestic environment, and developing countries can approach
international donors who provide technical assistance and capacity building in
these areas. Depending on the regulatory framework, the work laid out for policy
makers may include modifying existing regulations, but also introducing regulations
in countries in which none are available. For instance, the portfolio on building
construction of the International Organization for Standardization covers
standards for construction equipment; concrete, timber, and metal structures;