Closing Santa's Sweatshop: How to Deliver on Obama's and Congress' Toy Safety and Fair-Trade Promises

As U.S. toy imports hit record levels this year, U.S.
trade policy and outdated consumer safety protections expose America's
children to a flood of unsafe toys, according to a study Public Citizen
released today. "Closing Santa's Sweatshop" also documents campaign
pledges on import safety made by President-elect Obama and new members
of Congress - 34 of whom replace congressional supporters of the failed
trade-policy status quo generating the import safety crisis.

The United States is expected to import $23 billion in
toys in 2008, 90 percent of that from China. Imports this year
represent 90 percent of U.S. toys, which is the highest toy import
level and share on record. Many nations producing our children's toys
have extremely lax safety standards and enforcement. Yet, while toy
imports exploded by 562 percent from 1980 to 2008, the budget of the
agency responsible for toy safety, the Consumer Product Safety
Commission (CPSC), was cut by 23 percent, with staffing cut nearly 60
percent during the same period.

"While production of our children's toys has become
globalized, our consumer safety system and its protections against
injury and death have not," said Lori Wallach, director of Public
Citizen's Global Trade Watch division. "Our trade agreements contain
foreign investor protections that promote a 'low-road' strategy of
offshoring toy production to nations with lax safety standards and low
wages, while simultaneously imposing limits on the safety standards and
inspections we can apply to imports."

Unfortunately, the threat of toy safety improvements
being attacked as "illegal trade barriers" under current U.S. trade
agreements is no longer only hypothetical. The report describes actions
taken by China in 2008 invoking two U.S. safety initiatives relating to
state-level bans on lead and bisphenol A (BPA) in toys that China
claims violate World Trade Organization (WTO) rules. U.S. laws
challenged at the WTO have been ruled against more than 80 percent of
the time.

"The Consumer Product Safety Improvement Act of 2008 represented a real step forward on product safety but it failed
to thoroughly address import-specific concerns," said Todd Tucker,
research director of Public Citizen's Global Trade Watch division and
author of the report. "Simply put, the new law does not adequately
update U.S. import safety policies for the 21st century reality that
many products are produced offshore."

As of 2007, the CPSC had no full-time staff at any of
326 U.S. ports and mostly focused part-time energies on Los Angeles and
New York, leaving 324 ports virtually unchecked, according to the CPSC.
In 2008, the CPSC claims to be monitoring at least nine of America's
326 ports, but could not confirm if there were any full-time safety
inspectors at any U.S. port. Moreover, even once the new law's
increases in CPSC staffing and budget levels are fully phased in, the
agency's staffing levels will actually be down 49 percent relative to 1980 levels.

The report concludes that to bring U.S. product
safety policy up to date with the realities of globalized production
and thus effectively remedy the imported product safety crisis,
Congress and the Obama administration must:

• Alter various provisions of U.S. trade agreements
  that currently encourage the offshoring of manufacturing and limit
  border inspection and imported product safety standards;
• Provide domestic agencies responsible for product
  safety with new authority to inspect products and facilities overseas
  such that a nation's failure to cooperate with inspections would result
  in imports from that nation being halted (as is U.S. policy for
  imported meat and poultry);
• Temporarily halt suspicious imports via a "hot button" prior to a hearing;
• Generate funding to ensure inspection of goods produced offshore; and
• Require import bonding to fund recalls.

"Fortunately, both President-elect Obama and 71 members
of Congress elected in 2006 and 2008 campaigned on fair trade,
including strengthened imported product safety," Wallach said. "These
policymakers replaced predecessors who did not prioritize import safety
and other fair-trade policies. Consumers expect these officials to
honor their campaign pledges."

The Public Citizen report highlights candidate
commitments based on a comprehensive analysis of more than 130 races
with an updated appendix summarizing the import safety and fair
trade-related commitments and campaign ads of more than 260 candidates.

For instance, Obama said: "As president, I'll work with
China to keep harmful toys off our shelves ... and will ban "toys that
contain more than a trace level of lead, coming from China or anywhere
else." He also said, "We should amend NAFTA (the North American Free
Trade Agreement) to make clear that fair laws and regulations written
to protect citizens in any of the three countries cannot be overridden
simply at the request of foreign investors." Obama's commitments became
part of the Democratic platform, which contained a trade reform agenda
not seen in past platforms, including that no future bilateral trade
pacts "will stop the government from protecting the environment, food
safety, or the health of its citizens; [or] give greater rights to
foreign investors than to U.S. investors."

In the 2008 elections, Obama was joined by 34 new fair
traders in the House and Senate who replaced members of Congress who
had supported NAFTA, the WTO, current China trade policy and other
anti-fair trade measures. These new fair traders came from both parties
and all regions of the country - especially outside the Rust Belt,
which Beltway pundits have considered the only place trade issues
resonate - and included Rep.-elect Jared Polis (D-Colo.),
Sen.-elect Jeff Merkley (D-Ore.), Rep.-elect Bobby Bright (D-Ala.),
Sen.-elect Mark Begich (D-Alaska) and Rep.-elect Kathy Dahlkemper
(D-Pa.), among others highlighted in the report. These new members will
be joining a growing bloc of fair traders in Congress who will be
seeking to remedy the problem cited so clearly by Polis, who said: "The
Bush administration is asleep at the wheel while multinational
corporations are putting profits before safety and products that harm
kids are entering our country from China and other nations with poor
safety records ... We need to make sure that defects are identified and
addressed before products reach the shelves and get in the hands of our children."

READ the report.