Monday, June 18, 2007
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The rise of trans-Pacific regulatory conflict
In the past two days there have been two stories in the press suggesting that the U.S. will be butting heads with China and India over a variety of regulations.
On Sunday, the Washington Post's Marc Kaufman writes that the growth of pharmaceutical imports is triggering health and safety concerns:
India and China, countries where the Food and Drug Administration rarely conducts quality-control inspections, have become major suppliers of low-cost drugs and drug ingredients to American consumers. Analysts say their products are becoming pervasive in the generic and over-the-counter marketplace.Meanwhile, in USA Today, Jayne O'Donnell reports about another brewing regulatory problem -- lead levels in childrens' jewelry:
The Chinese government opposes a proposed U.S. standard limiting the amount of lead allowed in bracelets, necklaces and other jewelry sold for children.If you read both articles, these two cases are not identical. There appears to be a strong justification for ratcheting up the lead regulations, while problems with pharmaceutical imports remain more hypothetical than real.
Going forward, it will be interesting to see whether affected domestic industries will be lobbying for regulatory barriers rather than more overt forms of protectionism. The thing about regulatory barriers is that they are not always protectionist in motivation. And that's precisely what makes them more attractive for import-competitive sectors.
UPDATE: Thanks to Nicholas Weaver for sending me this New York Times story by Walt Bogdanich on Chinese resistance to regulatory investigations. Definitely worth a read.posted by Dan on 06.18.07 at 08:07 AM
Actually, read the NY Times articles on phony glycerine from China.
I don't consider phony drug ingredients which have killed hundreds a theoretical problem.
posted by: Nicholas Weaver on 06.18.07 at 08:07 AM [permalink]
I have to agree with Nicholas, when the public safety is involved barring goods from overseas is not protectionism.
China and India have shown that they are not reliable trading partners. Bigotry plays a part in that manufacturers in both countries don't think we're worth safeguards. But corruption plays an even bigger role. In neither nation is there any real accoutability, and so bribery and graft runs riot.
It's the same sort of prejudice that allows the exportation of adulterated goods to America, only this time expressed by the elite towards the common folk. The very same prejudice which leads to such as the TSA and its perversion of security at airports around the country.
We hear lots of noise about how China and India are fast risng competitors who bid fair to overtake us sometime in the future. No such thing. Unless they enact serious and comprehensive social and governmental reforms each will collapse harder than the Soviet Empire in 1990, and sooner than we expect.posted by: Alan Kellogg on 06.18.07 at 08:07 AM [permalink]
Also, just in general, Chinese manufacturers can have serious Chutzpa (the "Kill your parents and then claim sympathy as an orphan" kind...)
I got a Woot "Bag of Crap": 3 random crappy items and a decent bag. One of the three items was a Made in China "Forever" type flashlight, where the LED is charged by a back and forth generator...
Except it was a FAKE forever-type flashlight. The coil on the 'generator' was not hooked up and was just a single winding of copper wire, instead of a magnet there was just a hunk of metal with two rubber bumpers, the circuit board had no components just a spring switch, and there were two flat-cell batteries to power the LED!
Given the small-unit (16 quantity) whosale price is stillposted by: Nicholas Weaver on 06.18.07 at 08:07 AM [permalink]
Cuttoff because of less-than. small unit quantity for the real thing is $4 or less for quantity 16, you have to wonder just how low a chinese manufacturer will stoop.
I was told by the current administration that "candian drugs" are not safe and need to be banned...so they were banned. If the current administration continues to allow drugs from India and China they must feel they drugs are safe. The current FDAs word is good enough for me.posted by: centrist on 06.18.07 at 08:07 AM [permalink]
Welcome to globalization and a loss of quality control. Yes, yes, I know the marketplace and political influence will eventually work it out, but after how many are harmed? What happens once we have relinquished all of our manufacturing in the pursuit of cheap consumer price, become totally reliant on imports (what..... we aren't already there?), have nothing of significance to export, and becoming a nation of beggars, no longer can influence unacceptable behavior?
Assuming exporting nations put into place qc agencies forcing its manufacturers to improve quality, and the US, with tax payer assist, improves its import surveillance, will cheap imports continue to be cheap?posted by: bluhawkk on 06.18.07 at 08:07 AM [permalink]
Saw an article in Chemical & Engineering News, which is the trade magazine of the American Chemical Society. It's basically Newsweek for chemists.
Apparently, it's OTC drugs and nutraceuticals that are really at risk for problems as they don't get routinely inspected by the FDA. Actual prescription pharmaceutical ingredients do get a much closer look.
This isn't much of a relief, though. I'd argue that more people have exposure to OTC drugs that prescribed ones.posted by: Klug on 06.18.07 at 08:07 AM [permalink]
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