Recent China Manufacturing Issues Highlight Importance of Import Safety

Recent waves of import product bans, alerts, recalls, and news headlines have generated consumer shock around the world. The global media frenzy impacts all companies that source products abroad for domestic consumption by challenging their import safety practices.

The torrential problems facing today’s exports from China should serve as a wake-up call for all importers that the time to act is now – be proactive and not reactive. Do not wait to be the media subject of the next consumer product recall, scandal or catastrophe. While today’s focus may be on China-made or sourced products, it is not the only goods and materials source for large-scale importers. Make no mistake – unsafe and hazardous imports can originate from anywhere around the world; and companies need to focus on their entire global supply chain, layer-by-layer, to know all that is necessary to ensure that the safety and quality of those products is not inferior or somehow compromised.

On July 18, President Bush issued Executive Order 13439 establishing an interagency working group on import safety. Chaired by the Secretary of Health and Human Services, the group includes members from key agencies such as Secretary of State, Treasury, Agriculture, Commerce, Transportation, Homeland Security, Attorney General, Director of the Office of Management and Budget, U.S. Trade Representative, Environmental Protection Agency, and Consumer Product Safety Commission (CPSC).

The group’s purpose is “to identify actions and appropriate steps that can be pursued, within existing resources, to promote the safety of imported products.” The group’s focus will include: foreign governments, foreign manufacturers, private sector exporters, U.S. importers, and federal, state, and local government agencies. The working group has to report to the President within 60 days (by mid-September) unless extended.

The group also aims to identify best practices used by U.S. importers in:

  • Selection of foreign manufacturers
  • Inspecting manufacturing facilities
  • Inspecting goods produced before export or distribution in U.S.
  • Identifying origin of products
  • Safeguarding the supply chain

As the U.S. government looks for ways to step up enforcement of import safety, the question of all companies should be: “What are you doing to make sure your imports are safe?

Companies must put consumer protection first and above any other motivations. In the end, we are all consumers and should expect nothing less! Before the U.S. government comes knocking on your door, here are some areas to consider as you evaluate your current business:

IMPORT SAFETY CHECKLIST

I Inspections – Do you inspect your foreign factories (announced/unannounced)?
M Management – Do you have commitment and corporate objectives?
P Policies – Do you have procedures to ensure corporate objectives are followed?
O Origin – Do you identify and verify product origin?
R Recalls – Do you have a program to inform consumers and agencies of defects?
T Testing – Do you test products (internally/externally) and document/track results?

S Suppliers – Do you have quality/safety requirements in writing/acknowledged?
A Audit–Do you have a product safety audit plan?
F Follow – Do you follow or benchmark what your competitors are doing or recommending?
E Examine – Do you examine what’s going on with your product outside the U.S.?
T Training – Do you train internal units and suppliers on product safety?
Y You –Know your product and must exercise reasonable care to protect consumers

Manufacturers, importers, exporters, distributors and retailers—should take the proper precautions now and exercise reasonable care relating to products intended for U.S. consumption. Ultimately, those that put quality and safety first will succeed in the global arena and achieve consumer confidence.

Despina Keegan is a senior trade advisor for JPMorgan Global Trade Services in New York.

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