Technical Standards and the Integration of the U.S. and Canadian Economies

Abstract

Introduction A March 1943 editorial in the Quarterly Bulletin of the Canadian Engineering Standards Association (CESA) noted the role being played by technical standards in the growing U.S. trade hegemony in Central and South America. (1) Stirred but not shaken by evidence that the days of Britain's informal Latin American empire were over, the editor warned that Canada must respond appropriately. In fact, by this time Canadian business had for decades been involved as a junior partner with the U.S. in the development of North American technical standards. Such standards--roughly, agreements among makers and users of manufactured items on their dimensions and other characteristics--are crucial to the workings of advanced industrial economies. (2) They are a little-noticed part of how, literally at a nuts and bolts level, the two nations' economies were integrated. As such, they should be seen along with such traditionally cited factors as levels of U.S. equity investment in secondary manufacturing, shared consumer tastes, and the north-south grain of the continental geography in explaining why, when, and how such integration occurred. (3) There is a particular irony in the position of the CESA. Founded in response to a British initiative, the Association had a formal commitment to bringing British technical standards to Canada while remaining at arms length from the U.K.'s standard-setting protocol. But from its earliest work, the CESA acted as a major conduit for the flow of U.S. standards into Canada, standards that came to dominate Canadian manufacturing. The Association did receive a small subvention from the federal Department of Trade and Commerce and has had ties to both the National Research Council of Canada and the Hydro-Electric Power Commission of Ontario. Even so, it was a private body. Given this, the story offered here is less one of public policy and capitalist strategies than it is one of quotidian technical decisions by engineers in both the public and private sectors. Indeed the harmonizing of U.S. and Cana dian technical standards proceeded irrespective of the vicissitudes of tariff and investment policies. What are standards? (4) An illuminating example: if utility companies, the makers of lighting fixtures, and the manufacturers of light bulbs could not agree about bulb sizes, screw threads, plug prongs, and the definitions of fundamental electrical units we would all be, quite literally, very much in the dark. At the very least we would be greatly inconvenienced. Pushing a bit further: think of the mild inconvenience of worrying about different currents for razors and hair dryers whilst traveling abroad and increase this by orders of magnitude. In fact, though, agreements are reached on a vast range of products, components, and services; these agreements are called consensus standards. Consensus is usually reached through committees of engineering professional bodies or of organizations devoted to the promulgation of standards. Adopted voluntarily, these standards make industrial production in its present form possible. Among the chief economic benefits of standards are reduction of inventory costs and the lo wering of transaction costs. In spite of mechanisms to prevent such abuse, standards can be manipulated to gain competitive advantage for particular firms. This, however, is extraordinary and is seen by most who participate in their formulation as defeating the very purpose of standards. Although voluntary, standards gain the force of law when written into contracts or government regulations. As standards underlie a variety of safety codes (electrical, building, fire, earthquake) a persuasive claim can be made for standards serving the public interest. Early Standards, Early Influences Even before Confederation, Canadians had begun to see the economic wisdom of conforming to U.S. norms. Although keeping Imperial weights and measures, the colonial government of Canada, to the intense annoyance of the British Treasury, in 1858 switched to a decimal currency. …