Who Exactly Are Safety Standards Protecting?
Posted by Consumers for World Trade Thu, 09 Aug 2007 18:04:00 GMT
Michael VirgaAugust 9, 2007 -- Most people would agree that governments have a legitimate role in ensuring the safety of any goods, ranging from food to medicine to children's toys. Here in the U.S., consumers are protected by a network of Federal agencies. Enormous entities like the Food and Drug Administration and the Consumer Products Safety Commission are devoted to this task. Similar government agencies exist in other countries. Yet when it comes to imports, an alarming trend shows that many governments have begun using their role as consumer guardians to play politics with safety issues. This is nowhere more true than with regard to imported food. Many of the world's major trading nations, including India, China, Russia and the United States, are restricting each other's food imports over claims of uncertain product safety; however, safety may not be the only thing on the agenda for many of these governments.
Using safety standards to protect consumers from dangerous products is certainly a laudable policy. Yet using safety standards to protect domestic producers and farmers from foreign competitors is not only unfair but hurts consumers. After many decades of reducing import taxes, many countries can no longer use these taxes to protect certain domestic producers from the global marketplace. With tariffs on certain products already low, governments may use safety concerns an effective way to exclude imports that would otherwise out-compete these domestic producers.
As it pertains to agricultural commerce, trading nations impose their own specific safety and sanitary regulations on imports referred to as "Sanitary Phyto-Sanitary (SPS)" standards. There is no internationally agreed-upon set of SPS standards, so countries can essentially concoct whatever standards they want under the guise of consumer safety. For example, the European Union prohibits the import of many U.S. agricultural commodities containing genetically modified organisms for fear of food safety despite broad scientific evidence to the contrary. A recent article in The Wall Street Journal shows how countries are increasingly using SPS standards as a non-traditional, non-tariff barrier to food and goods entering their respective states.
This type of discriminatory trade policy hurts consumers in a number of ways.
Limiting imports of cheaper foreign products will undoubtedly drive the price
of those goods much higher, as well as limit the variety foods and goods available
to consumers. Another dangerous risk associated with using arbitrary safety
rules to exclude imports comes from the risk of retaliation from our trading
partners. For example, if America were to slap an arbitrary ban on another
country's exports for supposed fear of safety, there will likely be retaliatory
safety bans by that country against American goods. Such a development would
hurt America's exports to the rest of the world and potentially even result
in a loss in American jobs. It is important that governments employ safety mechanisms
to protect their citizen-consumers, but the use of safety standards as trade
barriers could prove more harmful than any faulty product.