FX International Payments
By Megan Doyle
Technical MRAs establish mutually recognized standards between each party involved in the cross-border trade of goods. These standards are often known as conformity assessment bodies (CABs). They typically include crucial quality control and regulatory information, such as data from certification bodies or testing laboratories.1 By recognizing each other’s CABs, importers and exporters help create a collaborative and cohesive global trade arrangement that facilitates international cargo trade, according to U.S. Customs and Border Protection (CBP). Since MRAs are founded on mutual trust, they can help create a “unified and sustainable security posture” from beginning to end of the global supply chain.2
MRAs can be either bilateral (between two countries or regions) or multilateral (between several countries or regions). They aim to link industries around the world by creating partnership programs to help expedite cross-border trade.3 This way, products that meet one country’s standards can be traded to another country without the need for further approval, testing, or modification.
Since 2007, the U.S. has signed MRAs with 11 countries or regions, including Canada, the EU, Japan, Korea, and
Mexico, and plans to sign more MRAs with additional countries in the future.4 Similarly, many other customs administrations around the world have signed MRAs with each other.5
In the U.S., MRAs primarily apply to telecommunications and pharmaceutical equipment. For example, the APEC-TEL MRA directly affects U.S.-based telecommunication companies. APEC-TEL is an international, multilateral trade agreement between economies in the Asia-Pacific Economic Cooperation (APEC) region and its partners all over the world, including the U.S., Australia, Canada, Chile, Japan, Vietnam, and more. This MRA contains specific technical requirements and is intended to “streamline the conformity assessment procedures for a wide range of telecommunications and telecommunications-related equipment.”6
Both the U.S.-Japan MRA and the U.S.-Mexico MRA also apply specifically to telecommunications equipment. Like APEC-Tel, they each aim to establish “procedures for mutual acceptance of the results of conformity assessment procedures” conducted by each party in accordance with the scope of the trade agreement.7,8
The U.S.-EU MRA, on the other hand, applies specifically to pharmaceutical goods and facilities. This trade agreement allows FDA and EU drug inspectors to use information developed within each other’s borders – inspections of pharmaceutical facilities, for example – in order to prevent duplicate assessments. This can allow regulators to spend more resources in potentially greater risk areas, if necessary.9
The APEC-TEL, U.S.-Japan, U.S.-Mexico, and U.S.-EU MRAs all aim to establish specific technical requirements that can streamline trade between these countries and promote “the recognition of equivalent standards or technical requirements” while saving time and “reducing the cost for companies that are engaged in trade in these sectors.”10,11
In addition, other countries have international trade agreements that apply to a broader range of goods. For example, the MRA between the EU and Switzerland applies to goods including machinery, personal protective equipment, toys, medical devices, and motor vehicles, in addition to both telecommunication pharmaceutical equipment.12
There are several primary benefits of technical MRAs according to CBP. MRAs can make bilateral and multilateral trade easier by because parties do not have to unnecessarily allocate resources across borders.13 This can effectively eliminate redundant assessment, saving importers and exporters – especially SMEs and midsized businesses – time and money.14
In addition, MRAs can help mitigate risks involved with international import-export trade by promoting trust between parties. In other words, since MRAs are mutually accepted and validated agreements, importers and exporters are more likely to hold each other to “high levels of health, safety, environmental, and consumer protection” standards.15
MRAs “encourage communications and information sharing among key stakeholders, including manufacturers, testing laboratories, certification bodies, regulatory authorities, designating authorities, and accreditation bodies,” according to the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST).16 That said, MRAs can offer greater regulatory transparency between countries by providing different countries with a means of a staying updated on each other’s manufacturing certification requirements.
Mutual recognition trade agreements can help expedite international trade by establishing mutually recognized quality control procedures. This enables importers and exporters to streamline trade while avoiding redundant assessments of goods, saving import-export businesses time and money.
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. “Mutual Recognition Agreements for Conformity Assessment of Telecommunications Equipment,” NIST.gov; https://www.nist.gov/standardsgov/what-we-do/conformity-assessment/mutual-recognition-agreements-mras
2. FAQ, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/documents/Mutual%20Recognition%20FAQs%20February%202016.pdf
6. “APEC-TEL MRA,” Asia-Pacific Economic Cooperation; https://www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-Technical-Cooperation/Working-Groups/Telecommunications-and-Information/APEC_TEL-MRA.aspx
7. “US-Japan MRA,” Standards.gov; https://www.nist.gov/standardsgov/us-japan-mra
8. “US-Mexico MRA,” Standards.gov; https://www.nist.gov/standardsgov/us-mexico-mra
9. “Mutual Recognition promises new framework for pharmaceutical inspections for United States and European Union,” U.S. Food and Drug Administration; https://www.fda.gov/newsevents/newsroom/pressannouncements/ucm544357.htm
10. “APEC-TEL MRA,” Asia-Pacific Economic Cooperation; https://www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-Technical-Cooperation/Working-Groups/Telecommunications-and-Information/APEC_TEL-MRA.aspx
11. “US-Japan MRA,” Standards.gov; https://www.nist.gov/standardsgov/us-japan-mra
12. “Mutual Recognition Agreements,” Internal Market, Industry, Entrepreneurship and SMEs; http://ec.europa.eu/growth/single-market/goods/international-aspects/mutual-recognition-agreements_en
13. FAQ, U.S. Customs and Border Protection; https://www.cbp.gov/sites/default/files/documents/Mutual%20Recognition%20FAQs%20February%202016.pdf
14. Agreement on Mutual Recognition Between the European Community and the United States of America, Part 68; https://www.part68.org/documents/resources/US-EC_MRA.pdf
16. “Mutual Recognition Agreements for Conformity Assessment of Telecommunications Equipment,” NIST.gov; https://www.nist.gov/standardsgov/what-we-do/conformity-assessment/mutual-recognition-agreements-mras