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-July 10, 2007


Global Supply Chain: Rash of Recent Safety and Counterfeiting Cases Seems Sure to Lead to Legislation from US Congress


Action is Needed, but Piracy, Safety, are Separate Issues; Should there be a “Sense of Alarm?”


By SCDigest Editorial Staff


A spate of recent news over problems with product safety and counterfeit goods, especially Chinese imports, is spurring Congressional action along a number of fronts.

In recent weeks, these issues have been well publicized, drawing increased consumer attention to what has, to some extent, been primarily a business-related concern. Concerns about import product safety have at least briefly reached center stage, rather than simply piracy, about which consumers have not traditionally shown much concern.

In just the past couple of months, there were significant safety issues with pet food imported from China, a major report showing Chinese imports were high on the list of toys that had experienced safety recalls, and Colgate announced concerns over counterfeit toothpaste that may have ingredients that could be harmful to some consumers (See also Executive View: Counterfeiting and Supply Chains; Will Product Safety Issues Create Need for an "Import Czar?"; Will Safety Issues with Toys Made in China Cause Regulatory Backlash?).

That has led to lots of action on Capitol Hill, and is interesting because legislation will likely have the support of both business and labor groups.

A new anti-piracy bill is being sponsored in the Senate by Sen. Evan Bayh (D, Indiana) and George Voinovich (R, Ohio) that would require the administration to submit a strategic plan to address counterfeiting, including increasing resources and training for enforcement.

"If thousands of our businesspeople were being held up at gunpoint in a foreign country, if our laboratories and research facilities were being raided and shut down by unidentified individuals, there would be a sense of alarm. That is, in effect, what is happening today, and yet we are not doing nearly enough," said Sen. Bayh.

Action in the House and related proposals in both chambers of Congress are expected. It has the strong support of the US Chamber of Commerce and other business groups, which claim counterfeiting costs US companies some $250 billion in lost sales. The action is also supported by major labor groups, though the issue is not real high on labor’s priority list.

The proposed legislation, however, primarily deals with just counterfeiting and privacy. It is gaining traction in large part because of perceived safety concerns over imports, which, with some exceptions, are really a different issue. For example, the contaminated pet food and recalled toys weren’t counterfeit products, they were legitimate products with unsafe design or manufacturing practices.

Legislators and regulators have also been looking hard at the safety issue, however, with a few lately calling for creation of an “import czar” that would enforce presumably tightened safety requirements and inspections.

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