APEC Market Access Group



APEC Market Access Group

Conclusions from Remanufacturing Presentations & Discussions

Canberra, Australia

Sunday, January 21, 2007

The APEC Market Access Group (“MAG”) received presentations today on the global remanufacturing industry from representatives of Caterpillar, the Rochester Institute of Technology, GE Healthcare and the China National Development and Reform Commission. The presentations provided strong evidence that there are environmental, labor, consumer, and government benefits from remanufacturing, and that such benefits are enhanced when barriers to trade in remanufactured goods are removed. Moreover, the presentations highlighted that existing trade barriers may limit consumers’ choice to purchase remanufactured products or services provided by such products, and therefore prevent consumers from taking advantage of the cost savings and associated social benefits derived from these high-quality, warranty-backed goods.

The presentations described the characteristics of the remanufacturing industry, the specific benefits of the industry and how APEC members might gain from the industry:

▪ Remanufacturing is among the most technologically advanced and environmentally friendly production processes in use.

▪ Remanufacturing transforms end-of-life products into same-as-new components and products typically used in industrial, medical, on-road, consumer, and other applications.

▪ Remanufactured products are sold with similar (often same-as-new) warranties and meet the same specifications and quality standards for reliability, durability and safety as products that are manufactured entirely from new materials, yet typically cost substantially less than brand new goods and use up to eighty five percent less energy in production.

▪ The remanufacturing industry creates great economic potential and benefits the environment, consumers and workers, both in advanced and developing economies.

▪ Several prominent universities, such as the Rochester Institute of Technology, maintain remanufacturing departments that perform important research on every aspect of the process, including design, disassembly, core analysis, reverse engineering, and testing. These types of academic efforts serve as the underpinning for further technological advances and efficiency gains in remanufacturing.

▪ The global remanufacturing industry, which utilizes complex scientific analysis in its production processes, covers a broad range of industry sectors, employs more than 500,000 people, and generates more than US $100 billion in annual sales.

▪ Economies with low labor costs are particularly attractive for remanufacturing facilities, and the remanufacturing industry tends to establish world-class facilities close to input supplies and consumer markets. For example, the typical model is for remanufacturing firms to establish market acceptance of remanufactured goods through exports and then look to establish local or regional remanufacturing production facilities to take advantage of proximity to inputs (used goods) and markets. Firms that have been able to establish acceptance of remanufactured products in a given market are more likely to invest in establishing production facilities in that market.

▪ Remanufacturing saves energy, reduces the production of greenhouse gases, and recycles the vast majority of materials used in the original manufacturing process. All APEC economies could benefit from remanufacturing because scarce resources are used more efficiently and the environmental impact of remanufacturing is substantially less than virgin-new manufacturing processes. Moreover, the remanufacturing business model depends less on labor cost containment because of the cost savings realized from the use of recovered goods, thus providing workers the possibility of greater job security and prosperity.

▪ Remanufactured products can help economies to develop their infrastructure economically with lower-cost high-quality products.

▪ Health systems in APEC economies could benefit greatly from the availability of remanufactured medical devices. High-quality, low-cost remanufactured medical equipment can both help national governments stretch public health dollars and make modern healthcare more accessible to millions of citizens.

▪ A good definition of remanufacturing can help to promote product acceptance, ensure quality control, and distinguish remanufactured products from used, as-is, secondhand, repaired, or refurbished products.

▪ APEC member economies could benefit from significant growth in the global remanufacturing industry, leading to the prospect of new remanufacturing production facilities that introduce high-technology practices into an economy, environmentally-sound production methods, and new employment opportunities.

▪ The unprecedented benefits offered by the remanufacturing industry have been limited to those economies that maintain policies that are open to imports and production of remanufactured goods. Global growth in the remanufacturing industry has been slowed by outdated regulations in some countries that do not distinguish between ‘used’ and ‘remanufactured’ goods.

▪ While APEC economies tend to have fewer barriers to trade in remanufactured goods, the workshop speakers suggest that economies interested in developing domestic remanufacturing industries and markets should consider what further steps may be taken to establish policies that promote greater acceptability of remanufactured products encourage investment in remanufacturing facilities in the Asia-Pacific region. The speakers are not looking for preferential treatment for remanufactured products; they are looking for a level playing field that treats remanufactured products the same as new goods.

▪ The speakers requested that when APEC members return home, they review their policies and update as necessary to ensure that remanufactured products are treated the same as new goods for trade purposes.

▪ The workshop speakers encourage MAG to highlight to appropriate policymakers that remanufacturing is an area that can contribute to the region’s sustainable development goals and with great potential for economic opportunities, where APEC economies are particularly well suited to develop domestic industries that are environmentally, consumer, and labor friendly.

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