Made in the World redefines trade

Out with "Made in X" or "Made in Y", the future is "Made in the World"

By Morand Fachot

Today, unlike a few decades ago, industrial goods are less and less "Made in X" or Made in Y", but they are "Made in the World", even if not labelled as such. As the number of electrical components from multiple sources and countries integrated in industrial goods grows, IEC International Standards and the IEC's comprehensive CA (Conformity Assessment) Systems are proving to be central to this integration and to the expansion of global trade.

This US Boeing 787 incorporates parts and systems made by dozens of suppliers in Asia, Europe and the US (Photo Boeing Company)
This US Boeing 787 incorporates parts and systems made by dozens of suppliers in Asia, Europe and the US (Photo Boeing Company)

Recent trade concept

The "Made in the World" concept refers to a WTO (World Trade Organization) initiative launched "to support the exchange of projects, experiences and practical approaches in measuring and analysing trade in value added".

In traditional trade data methodology, the entire value of all exported goods is allocated to the exporting country; it therefore includes the value of the imported intermediate materials and components contained within it.

As this methodology proved to be incapable of reflecting international trade flows accurately, the WTO and the OECD (Organisation for Economic Co-operation and Development) jointly developed the TiVA (Trade-in Value Added) initiative, aimed at tracing the value added to goods along the whole of the production process. This way of measuring trade flows, no longer based on gross terms but on value-added terms, makes possible the correction of biases on the origin of trade imbalances, which can "lead to misguided, and hence counter-productive, decisions", according to the WTO.

Nothing really new for manufacturers

While the "Made in the World" concept may be relatively recent for international trade experts, and although it has been heralded as "a paradigm shift to analyzing trade", it has been implemented by industries throughout the world for a long time, albeit maybe not labelled as such.

As manufacturers have tried to integrate the most suitable, best or cheapest components within their goods, they have sourced these from many different suppliers in various countries.

The adoption of international and regional free trade agreements throughout the world has facilitated the exchange of goods and their production with an ever higher international content.

Of major concern when integrating components from every possible origin into products is their ability to operate together seamlessly, reliably and safely. Nowhere is this interoperability as essential and widespread as in electrotechnology, since nearly all industrial processes and goods rely on a wide and growing content of electrical and electronics components and systems.

No "Made in the World" without IEC

In addition to International Standards, conformity assessment represents another pillar central to "Made in the World" products.

The IEC CA Systems, based on IEC International Standards, provide independent testing and certification to ensure the safety, reliability and performance of products and systems.

Certification, performed by a person or body that is independent of the seller and the buyer, offers the highest level of confidence and the unbiased assurance of the safety of products and processes.

Not just "physical" products

IEC International Standards are often associated with physical components, systems and end-products such as wires and cables, drives, turbines, transformers, sensors, household appliances or audio, video and multimedia equipment, to name but a few.

However a number of IEC TCs (Technical Committees) and SCs (Subcommittees) prepare Standards for terminology, safety aspects, production processes and non-physical characteristics of systems, such as environmental conditions, dependability or EMC (electromagnetic compatibility).

An example of this is provided by IEC SC 3D: Product properties and classes and their identification, which has developed the IEC 61360 series for Standard data elements types with associated classification scheme for electric items. Of particular interest is the freely accessible IEC 61360-4, a CDD (Common Data Dictionary) database repository of concepts for all electrotechnical domains based on the methodology and the information model of the IEC 61360 series. The database helps meet the need for increased sharing and exchange of product data among organizations. It can handle any number of language variants, and currently has templates for English, French, German and Japanese.

IEC TC 56: Dependability, is another TC that prepares International Standards that do not concern physical aspects of components or products. Dependability covers availability performance and the factors that influence it: reliability, maintainability and maintenance support performance for many technological areas. (see article on Dependability in this e-tech)

"Made in the World" products came long before namesake concept

The adoption of IEC International Standards and CA Systems enables manufacturers throughout the world to export their goods for integration into other products and systems in other countries. This provides industries along entire production chains with major benefits in terms of flexibility, economies of scale and the capacity to respond rapidly to changes in demand.

Thanks to IEC International Standards, CA Systems and certification, manufacturing of "Made in the World" goods materialized significantly earlier than did the pervasive adoption of this label by international trade circles.

Gallery
This US Boeing 787 incorporates parts and systems made by dozens of suppliers in Asia, Europe and the US (Photo Boeing Company) This US Boeing 787 incorporates parts and systems made by dozens of suppliers in Asia, Europe and the US (Photo Boeing Company)
The European-made Airbus A350 includes parts and systems made in many countries including the US and Japan (Photo: Airbus) The European-made Airbus A350 includes parts and systems made in many countries including the US and Japan (Photo: Airbus)
These US-designed tablets are assembled in China and contain components made in Korea, Japan, etc., and US software (Photo: Apple Inc.) These US-designed tablets are assembled in China and contain components made in Korea, Japan, etc., and US software (Photo: Apple Inc.)