APEC Market Access Group

APEC Market Access Group

Conclusions from Remanufacturing Presentations & Discussions

Singapore – 21 February 2009

The APEC Market Access Group (“MAG”) received presentations today on remanufacturing from representatives of Caterpillar, the Rochester Institute of Technology, GE Healthcare, Dell, and the ChinaMinistry of Industry and Information Technology. 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 thatexisting 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 benefitsderivedfrom these high-quality, warranty-backed goods. In addition to the presentations received, MAG delegates listened to panel discussions from industry, academic, and government experts and participated in a “Hands-on Remanufacturing Process Simulation” to further their understanding.

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

The remanufacturing industry creates great economic potential and benefits the environment, consumers and workers, both in advanced and developing economies.
Remanufactured goods are "same as new" quality and are not used products.
Remanufacturing transforms end-of-life products into same-as-new components and products typically used in industrial, medical, on-road, consumer, and other applications.
Remanufacturing is an environmentally friendly process and supports extended producer responsibility and sustainable development.
Remanufactured transactions include the "take back" of an "end-of-life" core.
Presenters representing the global remanufacturing industry seeka level playing field for trade in remanufacturedgoods.
Many APEC economies are the source for most of the new IT manufactured and refurbished components. However, the refurbished products face import restrictions/prohibitions outside of APEC economies. It is in the best interest of APEC economies to support efforts to promote open market access for these refurbished components outside of their group.
The use of refurbished components to service warranty contracts is a global industry practice that results in economic and environmental benefits to APEC economies, industry and consumers worldwide.
Remanufactured products are marked differently in order to distinguish them from equivalent new product and used products.
Remanufactured goods undergo comprehensive, consistent, and certified processes to ensure product quality.
Medical device remanufacturing has enormous benefits for the environment -- elimination of waste and pollution and reduction of energy and raw materials consumption.
Manufacturer-remanufactured medical devices are as safe and effective as when new and are regulated by government entities accordingly.
Remanufactured medical devices cost 20-50% less than equivalent new devices and thus can reduce healthcare system costs and increase access to modern, life-saving healthcare technology.
Some consequences of remanufacturing prohibitions include ethical suppliers may be blocked, non-compliant third parties could circumvent rules, patients may face quality and safety risk, and access could be denied to millions of consumers.
Remanufacturing of a product does not provide a “life cycle extension” but rather an additional “complete life cycle.”
Remanufacturing can match quality and reliability at a much lower cost.
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 recycled products.
There are ongoing academic efforts to study and further technological advances in remanufacturing. 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.

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.
Remanufacturing is a counter-cyclical industry. In times of an economic downturn, economies can turn to the remanufacturing industry to provide consumers the choice to purchase high quality goods at lower prices and to provide a source of employment because of its labor intensive nature.
Remanufacturing could aid the development of many APEC economies through expanding opportunities to purchase advanced products at reduced prices, facilitate investment, increase employment, and transfer valuable technology and skills.
APEC economies could benefit from remanufacturing because scarce resources are used more efficiently and the environmental impact of remanufacturing is substantially less than new manufacturing processes.

Global growth in the remanufacturing industry has been slowed by outdated regulations in some countries that do not distinguish between ‘used’ and ‘remanufactured’ goods.
The speakers requested APEC delegates to 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 encouraged MAG delegates to promote remanufacturing as 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.