Watch the video of this speech. This is in "streaming video" format.

Good Morning Ladies and Gentlemen.

Until just a few days ago, I was very much looking forward to being in Hong Kong with you. Unfortunately, developments in Washington required me to make the extremely difficult decision to stay behind rather than accompany our U.S. delegation to the Toy Safety Dialogue. I genuinely regret having to miss this important meeting and I hope that you will accept a recording of my remarks as a way for me to demonstrate my continued commitment to the work of the APEC Toy Safety Initiative.

Before continuing, please allow me to acknowledge those who worked so hard to make this event possible from both the private sector, under TIA’s sponsorship, and within governments. I would like to thank especially Ms. Jamie Ferman, the Project Overseer, whose tireless efforts ensured a great meeting in Singapore, last year, and made possible our gathering here today.

As Chairman of CPSC -- one of the key U.S. safety agencies and a partner agency for many of you – I am very interested in the work of this Toy Safety Initiative. APEC economies produce the vast majority of the toys imported to the United States, and almost certainly the majority of the toys consumed in the world. We have an inherent partnership as the consuming and producing economies, and a mutual interest in strong safety standards to save lives, especially the lives of children.

To this end, I believe U.S. and international regulators must build on the success that has come from working together and encouraging the improvement of existing toy standards and the creation of any standards needed to address emerging toy hazards. Our experience suggests that the most pressing emerging hazards include:

Choking hazards;

Powerful magnets that can be swallowed and create a deadly blockage in the small intestines;

Lead and other dangerous metals;

Strangulation hazards;

Sharp points and projectiles;

And dangerous chemicals.

It is the role of product safety regulators to ensure that all of these hazards are addressed by manufacturers and that they are not allowed to harm our children.

The U.S. experience with safety standards has been that you get a great deal of product safety by relying on robust voluntary consensus standards coupled with regulatory authority to intervene quickly in specific cases. This is a useful combination because most of the expertise for safe design and manufacturing is in industry, not in government. That’s why U.S. law originally set a preference for voluntary standards over mandatory regulations. This approach allows CPSC to rely upon voluntary standards if they are robust enough to eliminate or adequately reduce the risk of injury addressed and to act if the standards fall short. The Consumer Product Safety Improvement Act of 2008 – the CPSIA – recognized this principle when it made the ASTM F-963 toy standard mandatory. Yes, the law resulted in new federal toy regulations to address the market’s failure to meet the public’s concerns about safety -- and CPSC will review the standard periodically to ensure that it is adequate -- but the F-963 reference standard can continue to evolve largely in the private sector.

I would like to see that evolution take place in synch with the other major reference standards for toy safety because I think consumers will gain from expertise drawn from around the world and from closer harmonization of requirements in all marketplaces. I know it can be done; industry has already shown what it can accomplish when energies are focused on a common safety goal.

For example, consider how the toy industry’s record on safety has improved since the summer of 2007 when so many toys had to be recalled. With 22 billion dollars worth of toys being imported annually from APEC economies into the United States, there were only 41 toy recalls in our jurisdiction during 2009. That figure compares very favorably to 2008, when there were 162 toy recalls.

Although we have a lot still to do, progress such as this makes me optimistic that we can accomplish even more.

The CPSIA was the United States Congress’s answer to the deficiency it saw in production and supply chain practices and an inadequate level of conformity assurance for children’s products. In some cases, such as lead and phthalate levels, the law is very specific, but in general, it creates a new paradigm for standards, regulations, and conformance assurances when it comes to toys and other children’s products. It creates a system that fosters constructive change – change by U.S. toy designers and importers and by foreign supply chain managers and testing lab operators.

Under the CPSIA, my agency has implemented the law’s mandatory third-party testing program for children’s products. The program is transparent and based on existing global standards. You can find a list of well over 200 accepted labs from around the world on the CPSC Web site – many of them from APEC economies -- with more labs added each week. The base line requirements for a lab to participate in our third-party testing program are accreditation to ISO 17025 – the laboratory management and competency requirements – and accreditation for the specific testing scope, by an accrediting body that is a signatory to the ILAC mutual recognition agreement.

Congress put in place additional safeguards for manufacturer-owned labs and labs owned or controlled in whole or in part by a government – but they, too, must meet the baseline requirements I have described.

The CPSIA is also decisive in its ban on phthalates. The U.S. Congress mandated that 3 types of phthalates would be permanently banned, and 3 others would be temporarily banned, while being studied further. To facilitate that study, our Commission approved, during December 2009, the appointment of seven independent scientists to serve on a Chronic Hazard Advisory Panel -- we call that a “CHAP” -- to assess the potential health risks from exposure to phthalates and phthalate substitutes.

The seven respected scientists selected were nominated by the President of the National Academy of Sciences. Under the rules, the nominees generally cannot be officers or employees of the United States government and cannot receive compensation from or have any substantial financial interest in any manufacturer, distributor, or retailer of a consumer product. I think the selection process shows a willingness to work with foreign partners. Three members of our phthalates CHAP come from Germany, the United Kingdom, and Canada.

For the 3 phthalates that were banned permanently, toys for children 12 and under are prohibited from having more than .1 percent phthalates. This rule went into effect on February 10 and manufacturers, importers and retailers in the United States must comply with it.

Let me turn to lead. The progress we’ve seen recently must not tempt us to slacken our efforts to remove lead from children’s products. Almost one year ago, the CPSIA instituted the first mandatory limit for lead content in children’s toys and products in the U.S. at 600 parts per million. Then, in August of 2009, the limit for lead paint on toys dropped to 90 parts per million. And the total lead limit in substrates dropped to 300 parts per million. These are now some of the most stringent limits in the world.

CPSC is aware that changes such as this need to be communicated quickly and clearly to suppliers. My colleagues and I at CPSC are doing all in our power to bring clarity to which products are impacted by the law, establish testing protocols, and work to accredit a sufficient number of testing labs in APEC economies and around the world. Just a few weeks ago, my fellow commissioners and I voted unanimously to extend a stay of enforcement on testing and certification of many regulated children’s products. Let me be clear, while enforcement of specific CPSC testing requirements has been stayed, the products must still comply with all applicable rules and bans.

Some of the categories of children’s products to remain covered by the stay of enforcement include: children’s toys and child care articles with banned phthalates, children’s toys subject to ASTM’s F-963 toy safety standard, electrically-operated toys, bicycles, and children’s sleepwear.

In addition, the Commission has decided that a general certificate of conformity is not required for these categories of children’s products pending the requirement to begin third party testing and certification. A full list of required certifications and effective dates can be found on our Web site at www.cpsc.gov. A great deal of that information is also translated into Chinese on the Web site.

The stay of enforcement will remain in effect for the children’s products I just listed while CPSC continues to work toward recognizing labs. To maximize successful transition to these requirements, independent third party testing and certification will only be required for these categories of children’s products 90 days after CPSC publishes the laboratory accreditation requirements for any individual category in the U.S. Federal Register.

The Commission also voted to extend the stay on certification and third party testing for children’s products subject to U.S. lead content limits. That stay is extended until February 10, 2011. Under this decision, products must now meet the current 300 ppm lead limit, but certification and third party testing to show compliance will be required for all children’s products manufactured after February 10, 2011. It is important to note that many major retailers in the United States have demanded, and most likely will continue to demand, independent testing and certification from their suppliers in order to have their products placed in their stores.

The stay of enforcement will end on February 10, 2010 for four children’s products: bicycle helmets, bunk beds, infant rattles and dive sticks. Any of these children’s products, if manufactured after February 10, 2010, will be required to have certification based on independent third party testing. The testing must be conducted by a laboratory recognized by CPSC.

Unchanged is the ongoing requirement for independent third party testing and certification for all children’s products subject to the following consumer product safety rules:

The ban on lead in paint and other surface coatings

The standards for full-size and non full-size cribs and pacifiers

The ban on small parts

The limits on lead content of metal components of children’s jewelry

The Commission has decided not to require a General Certificate of Conformity for children’s products. Certifications for children’s products will be specific to regulated requirements once the stay of enforcement is lifted and third party testing is mandatory for products subject to those regulations.

A full list of required certifications and effective dates can be found on our Web site. Under the CPSIA, different rules apply to non-children’s products and I urge you to visit our Web site for more information on those items.

Consistent with the spirit of this APEC dialogue, my agency has spent the last year-and-a-half listening to stakeholders’ views on CPSIA implementation in an effort to maximize safety and at the same time, to minimize the financial impact on industry. Many of the comments we considered came from the toy industry in Hong Kong.

I am pleased to say that the Commission has voted unanimously to adopt an interim enforcement policy allowing component part testing. Under this policy, U.S. domestic manufacturers and importers now have a choice in certifying their products. As before, they can send samples of the entire children’s product out for independent third party testing. Now they also can certify their products as meeting lead paint and lead content limits in the following ways:

For lead in paint, they may obtain test reports from recognized independent third party testing labs showing that each paint on the product complies with the 90 ppm lead paint limit. OR they may have certificates from paint suppliers declaring that all their paint on the product complies with the 90 ppm lead limit, based on testing by recognized independent third party testing laboratories.

For lead content, they may obtain test reports from recognized independent third-party testing labs showing that each of the accessible component parts on the product complies with the 300 ppm lead limit. OR, they may have certificates from part suppliers declaring that all accessible component parts on the product comply with the 300 ppm lead limit, based on testing by recognized independent third party testing laboratories.

I must stress that while the stay of enforcement remains in effect for the certification and testing requirements for certain products, all products must comply with the safety standards and bans of the law. This includes the limits for lead content, lead paint, the ban on certain phthalates and the ASTM F-963 mandatory toy standard.

On our end, we will continue to put timely information on our Web site – in English and in other languages -- for reference by stakeholders. And we will continue web-based interactive training seminars that will provide practical information for industry as it seeks to comply with U.S. requirements. One such webinar for Chinese toy suppliers took place only last month.

While the stay of enforcement from testing and certification to F-963 compliance is in place, CPSC staff is working hard to develop testing protocols and accreditation rules for the regulatory implementation of each part of F-963. When the stay of enforcement is lifted, domestic manufacturers, importers, and their suppliers will be expected to comply.

Let me take a moment to make a prediction early on in 2010 related to F-963. I believe that the heavy metals cited in F-963, especially cadmium, are going to attract attention in the United States from consumer advocates, the media, and parents. I would highly encourage all of you to ensure that toy manufacturers and children’s product manufacturers in your country are not substituting cadmium, antimony, barium, in place of lead. All of us should be committed to keeping hazardous or toxic levels of heavy metals out of surface coatings and substrates of toys and children's products.

With the vast majority of toys consumed in the United States being imported from APEC economies, my agency fully recognizes that we live in a global marketplace. I am increasingly convinced that we regulators must increase our cooperation to best serve our consumers. As CPSC goes about the continued implementation of the CPSIA and our review of F-963, I assure you that we will be looking outward to find ways to harmonize our approach with our global partners unless cultural, economic, or other considerations warrant a unique solution.

One area where we have seen an increasing convergence of views on the right approach to increasing the safety of toys and other products is in the need for a systematic improvement of practices in the supply and distribution chain. During October of 2009, CPSC and AQSIQ met for our third Biennial Consumer Product Safety Summit. AQSIQ stated its recognition that consumer product manufacturers should work hard to guarantee quality and improve safety. It affirmed the importance of product safety and quality best practices through its supervision over consumer product manufacturers, which incorporates a risk rating system for products. It announced and is implementing New Regulation of Inspection and Supervision on Import and Export Toy by emphasizing product design, control of raw material, and product quality control to ensure that toys conform with relevant product safety requirements.

We at CPSC made clear our intentions to emphasize the need for U.S. importers to be more accountable as members of the supply and distribution chain. This includes addressing accountability for importers with regard to conformity assurance during production in a Final Rule on factors to be considered in assessing civil penalties, and creation and promotion of a new publication: Handbook for Importing Safer Consumer Products.

Additionally, we are planning to produce a series of webinars for U.S. importers of consumer products, focusing on the steps necessary to ensure adequate and relevant pre-market and production testing, including the need to ensure that foreign production facilities are knowledgeable about the federal product safety requirements that apply to the product being made.

Although we may be on our way out of the global recession, Asian toy suppliers have a long way to go before the red ink is behind them. I recognize that as my agency implements the CPSIA, international coordination in establishing and communicating new requirements can help the toy industry stay competitive in a world of international trade. I am as committed to transparency as I am to enforcement and as we go forward, I hope all of you will work closely with us through our comments process and open proceedings. It is essential that we find common ground through dialogue on “building safety into toys and children’s products.” The consequences of not building safety into a product, especially in a dynamic environment where there are not yet performance standards, can be grave – a lesson we have learned from magnets and which we cannot afford to ignore.

Voluntary efforts will only take us so far. In the U.S. market, the CPSIA has moved the emphasis on safety and conformance with standards as far up the supply chain as possible and performance by the various actors in the supply chain will be regulated. Over the next few weeks and months, CPSC will have to make tough decisions about whether manufacturing supply chains really are meeting new accountability requirements.

Let me close my remarks, by assuring you of my intention to focus on international cooperation – with China, with Europe, and with other key economies as our agency goes forward with its implementation of the CPSIA. I appreciate very much APEC providing an opportunity for me to once again share my thoughts on the challenges we face and opportunities before us as toy safety regulators.

Thank you all and I wish you very fruitful discussions today.