Chairman Inez Tenenbaum U.S.-China Consumer Product Safety Summit, Opening Remarks State Department

H'wan Yeeng.

Good morning and welcome to the Fourth United States-China Consumer Product Safety Summit.

I am honored to lead the delegation from the Consumer Product Safety Commission in this two-day summit with our colleagues from The General Administration of Quality Supervision, Inspection and Quarantine in Beijing.

Vice Minister Sun, Director General Wang, and the distinguished delegation from the People's Republic of China, thank you for travelling to Washington, D.C. to participate in this important event.

Shieh' shieh'.

I would also like to extend my thanks to the panelists who will share their insights with us during the public sessions today and tomorrow.

And I want to give a warm welcome to the Chinese language students from Winston Churchill High School in Potomac, Maryland, whose skills are being put to good use during the summit.

I believe this summit will highlight the noteworthy progress CPSC and AQSIQ have made-and will continue to make-to promote good manufacturing, better compliance with safety standards, and best practices in product safety.

Both of our agencies are committed to protecting the safety of our consumers, and through cooperation and collaboration we can strengthen consumer confidence in our marketplaces.

While millions of children and parents may be unaware of this summit, those millions of children and parents are still counting on us-they are counting on us to put their interests and safety first and foremost.

In turn, I call upon both delegations to find new opportunities to work together and to put the interests of families from Shenzhen to St. Paul, from Tianjin to Toledo above all other interests during this summit.

While we work to bolster consumer confidence in the safety of imported products, I want American consumers to know that progress has been made in recent years.

The serious concerns of consumers in 2007 and 2008 led to the creation of new laws and requirements.

These new laws and requirements have created a stronger product safety net for children in 2011.

In turn, the perceptions of the past should not be projected onto all Chinese products made in the present.

The times have changed and the rules have changed.

As CPSC established new rules for children's products, many Chinese companies changed the way their products were designed, manufactured, and tested.

There is still work to be done, but the progress I have witnessed shows no sign of slowing down.

During my remarks this morning, I plan to discuss how the relationship between CPSC and AQSIQ started, the current state of our cooperative efforts, and what the future holds.

Let's start at the beginning. In April of 2004, CPSC and AQSIQ established our original memorandum of understanding. The agreement at that time was focused on manufacturing processes and exploring ways to increase Chinese manufacturers' understanding of the product safety requirements in the United States.

The intentions at that time were sound and our agencies began to exchange information, but proper safeguards were just not in place to keep up with the expanding supply chain.

In 2007 and 2008, failures in the system were exposed.

Although a safety standard had been in place for 30 years, lead paint was found on toys. Although cribs were intended to be a safe haven for young children, drop sides were breaking. And while innovation had led to powerful magnets being introduced in construction sets, the magnets were ending up inside of the bodies of children, instead of the toy box.

The product safety system needed to be strengthened.

Through more stringent U.S. safety requirements for toys and children's products, enhanced training, the closure of noncompliant toy factories in China, and CPSC and AQSIQ issuing similar warnings to manufacturers about lead and cadmium, positive change started to take hold.

Since taking over as Chairman in 2009, I have repeatedly stated that although the product safety problems in 2007 and 2008 hurt consumer confidence, they did not stop the demand for Chinese goods.

Rather, the economic recession was the cause for a brief slowdown in 2009 in the growth of Chinese imports.

At CPSC, we anticipated that the pace of Chinese imports would rise once again, and that certainly was the case in 2010.

CPSC's data shows that imports from China comprised about 47 percent or $300 billion of the $630 billion worth of all consumer products that came into the U.S. in 2010.

This was 210 percent higher than Chinese imports in 2001, and 24 percent higher than 2006.

2010 was actually the first time that consumer product imports from China exceeded those of the other top 20 nations exporting to the United States.

I would like to point out that Mexico and Canada are the second and third leading importers and CPSC hosted the first North America Product Safety Summit just three weeks ago. And ensuring the safety of Chinese made products imported throughout North America was a shared value expressed during that summit.

In looking at our data, toys, apparel, fireworks, and consumer electronics are some of the top product categories that demonstrate how important it is for CPSC and AQSIQ to work cooperatively.

Eighty-nine percent of all toys imported into the U.S. in 2010 were made in China. Those toys were valued at $19.8 billion.

Those numbers more than justify the investment that CPSC has made in working with Chinese toy manufacturers to encourage compliance with the stringent lead and phthalates limits in the U.S. and the mandatory toy safety requirements.

With a value of $32.5 billion, 41 percent of all apparel sold in the United States was imported from China in 2010. China has had a strong share of the apparel market for many years.

This is why we work so closely with AQSIQ to educate apparel manufacturers about the hazards and standards which are tied to drawstrings, small parts, and flammability.

China also has the largest share of electrical and electronic product imports, with 58 percent of all imports in 2010. China's share of electrical and electronic imports grew 24 percent from 2009 to 2010, with a total value of $71.5 billion.

The safety of notebook computer batteries, extension cords, Christmas lights, and electrically powered toys is very important to CPSC, which is why we have educated and trained Chinese manufacturers on the standards for these products.

CPSC has been conducting training sessions for stakeholders in China for many years.

But, in recent years, we have increased the frequency and breadth of our training and this has been a key component of our enhanced relationship with AQSIQ and Chinese manufacturers.

In just the past 12 months, working together, we have provided training on U.S. requirements to more than 6,000 industry representatives-either in person or via a webcast.

These educational sessions have enhanced the understanding by Chinese stakeholders of the safety requirements that must be followed in order for products to reach U.S. store shelves.

This has helped CPSC and AQSIQ to turn more of our attention to best manufacturing practices.

We are currently working together to implement globally recognized best practices in product safety from end-to-end in the supply chain-from design specifications to manufacturing practices to testing protocols to export procedures.

During my visits over the past few years to Beijing, Shanghai, Hong Kong, and Wuxi, I have continuously focused on the best practice of building safety into products intended for the hands of American consumers.

This approach is consistent with my belief that we need to be proactive in addressing safety issues and emerging hazards at the source.

One of the most exciting advances that CPSC has made in recent years to be more proactive in working with our counterparts at AQSIQ is the opening of our first foreign office in Beijing.

Vice Minister Sun, I want to thank you for AQSIQ's support and assistance in helping CPSC open our new office earlier this year.

I also want to recognize the extraordinary efforts of our China team, Patte Bittner and Sylvia Chen at headquarters; and in Beijing, Jeff Hilsgen, our Regional Product Safety Attaché for the Asia-Pacific region; and Jenny Wang, our Regional Product Safety Specialist.

The Beijing office is fully functioning and through dialogue with foreign regulators and stakeholders across the region, Jeff and Jenny are promoting two-way communication, regulatory alignment, and best practices.

Jeff and Jenny, you are doing a great job. Please stand up and be recognized.

I would like to discuss another area of information sharing between CPSC and AQSIQ that has helped us improve our relationship and that involves recalls.

Our International Programs team has a system in place that triggers a notification to our colleagues at AQSIQ when we announce a recall of a product manufactured in China.

The system is intended to assist our counterparts with rapid response to emergency situations, like the Aqua Dots recall years ago, or to address patterns, like a series of bicycle frame recalls.

It all comes back to prevention and being proactive. We know that recalls do not always lead to defective products being removed from consumer's homes, so it is our goal to prevent a repeat of the situation that led to the recall by notifying AQSIQ.

Toys are one of product categories where we have seen a precipitous drop in recall notifications to AQSIQ in recent years is toys. When we talk about progress, we have to talk about toys.

In 2008, there were 172 toy recalls in the U.S.

The number of toy recalls dropped from 172 in 2008 to 50 in 2009, and it dropped again to 44 in 2010.

The numbers are moving in the right direction.

Only three of the 44 toy recalls last year were the result of lead violations. Those three recalls represented a drop from nine in 2009 and 19 in 2008.

Now that's progress.

I will announce our 2011 toy recall numbers in a few weeks, but all signs point to the numbers continuing to move in the right direction.

Toy manufacturers and distributors in China have responded to the calls for compliance with U.S. lead regulations, which are now set at 90 part per million for lead paint and 100 parts per million for total content.

Those are some of the lowest limits in the world.

The results of the changes made by industry in the supply chain are helping to restore the confidence of American parents-confidence that lead is not being added to toy paints or substrates.

Now I would like to address cadmium in children's products. I believe CPSC showed the value of being proactive and decisive.

We demonstrated the ability to learn from past mistakes, and in turn, we held off what might have been a repeat of the wave of lead that swept into the U.S. years ago.

We found dangerously high levels of cadmium in five brands of metal jewelry in 2010, which we recalled, and we turned back a few shipments of metal jewelry at U.S. ports before the goods ever made it into the hands of children.

The number of units of jewelry recalled due to cadmium pales, however, in comparison to the 180 million pieces of metal jewelry recalled due to lead.

I sent a clear message to Asian regulators and manufacturers in January 2010 to not substitute cadmium in place of lead, and I was very pleased to see AQSIQ send the same message to manufacturers soon thereafter.

CPSC has a special marketplace and port surveillance program that involves screening children's products for cadmium, and we are closing in on stronger standards for cadmium in toys and metal jewelry.

These are all signs of continued progress.

Now similar to most relationships, there are areas where our two nations are headed in the right direction and there are also times of disagreement. I believe we are headed in the right direction to reduce children's exposure to lead and cadmium, but one area of lingering disagreement relates to Chinese made drywall.

I have been disappointed for a number of years that Chinese manufacturers, some of them state owned, have failed to step up and do what is fair and just to help the thousands of families who have been deeply impacted by problem drywall.

Our colleagues at AQSIQ know how I feel about this issue, and I believe there is still time for Chinese companies to take responsibility and right this wrong.

So far, I have addressed how our agencies first started working together and where our focus is now. I would like to shift to a discussion of where we should steer into the future.

A key driver for CPSC as we chart our course into the future is our new Strategic Plan. This plan is guiding us toward a long-term approach that I believe is best for CPSC-to be even more proactive and even more focused on prevention rather than reaction.

With limited resources, being proactive is the best path toward success for CPSC. And success for CPSC means working to become the global leader in product safety.

On the injury prevention front, we will use the Strategic Plan to bolster our already rigorous hazard identification effort.

From the dangers associated with toxic metals, to the risks of strangulation related to window cords and drawstrings in outerwear, we have a proven track record of being a global leader in hazard identification.

What our Strategic Plan also will do is help us turn hazard identification into injury prevention and life saving.

In addition to rigorous hazard identification, the Strategic Plan has a specific goal calling for CPSC to have a commitment to prevention.

Our new Office of Education, Global Outreach, and Small Business Ombudsman will play a major role in carrying out this goal.

I am pleased to be able to share with all of you that Dean Woodard was just appointed this week to be the new Director of the office. Dean was a senior manager in our Office of Compliance and has experience in academia, business, and international standards-making.

Dean, please stand.

The new office will be tasked with staying committed to the vision of achieving best manufacturing and best import practices in China and the United States.

And the Office of International Programs will coordinate even more closely with AQSIQ staff, key manufacturing associations, and importers and exporters in China and the United States.

I believe that by establishing an office dedicated to addressing the questions and concerns of the regulated community, CPSC can facilitate the transfer of knowledge across industries and borders.

This, I believe, will ultimately create safer products through better educated manufacturers.

I am hopeful that our new Office of Education also can collaborate with colleges and universities on special educational courses, domestically and internationally.

In fact, CPSC is already involved in ongoing conversations with several institutions of higher learning to explore the development of meaningful certification programs related to best manufacturing processes in China.

It is my hope that this initiative can result in academia playing a leading role in training a future generation of experts in supply chain management.

This is my vision of the future. It is ambitious, it requires integration and collaboration, and it seeks to bring mutual benefits to consumers and companies who do business in the United States and China.

I would like to close my remarks this morning by expressing my hope that the work informed and inspired by this summit will result in safer products.

We can learn from each other's experiences and apply that to the benefit of consumers in each other's jurisdictions.

Our staffs will be working hard over the next two days and looking for opportunities to enhance our coordination and build on the progress we have made.

Vice Minister Sun, I look forward to our meetings together, to providing you with a tour of new product testing and evaluation center, and announcing the results of our summit.

I would also like to express my deep appreciation for the extraordinary efforts of our colleagues at the State Department for allowing us to use this outstanding conference center.

To all of the attendees, thank you for joining us and enjoy the summit.