Despite One-Stop Lab, Producers Still Complain about

UNCLAS SECTION 01 OF 02 GUANGZHOU 000225 SIPDIS SENSITIVE SIPDIS STATE PASS CONSUMER PRODUCTS SAFETY COMMISSION RICH O'BRIEN/INTL PROGRAMS STATE PASS USTR CHINA OFFICE STATE PASS HOMELAND SECURITY COUNCIL STATE PASS IMPORT SAFETY WORKING GROUP E.O. 12958: N/A TAGS: ETRD EIND TBIO ECON PGOV CH SUBJECT: Despite One-Stop Lab, Producers Still Complain about Duplicate Testing REF: A) GUANGZHOU 146; B) 2007 GUANGZHOU 1226 (U) This document is sensitive but unclassified. Please protect accordingly. Not for release outside U.S. government channels. Not for internet publication. ¶1. (SBU) Summary: Even with the opening of south China's first joint-venture testing lab that will provide one-stop shopping for third party and government testing, toy manufacturers in the Pearl River Delta complain about the burden of meeting multiple standards. They believe that that a new conformity assessment program established by the U.S. toy industry and new laws issued by state governments will further increase duplicate testing. In addition, they find it difficult to obtain up-to-date information on recent changes in various standards around the world. Toy industry insiders continue to express hope for toy standards harmonization, which would increase overall safety and reduce total costs for safe, high quality toys around the world. End summary. One Stop Testing -- Joint Venture Testing Lab Opens -------------- -------------- ¶2. (SBU) Intertek and the Guangdong branch of China Inspection and Quarantine Service (CIQ) officially unveiled their new joint venture toy lab on March 28. Intertek executives described the joint venture as a critical step for south China's toy industry because it will lower overall costs by reducing the need for duplicate testing at third-party and government laboratories. Executives representing several foreign toy buyers said they were impressed with the new lab and pleased by the prospect of a streamlined testing process. Mr. Chen Yang of Guangdong CIQ said the new lab doubles the CIQ's toy testing capacity in Guangdong Province. Guangdong CIQ will assign as many as 10 officers at a time to work at the joint venture laboratory, mostly in oversight and management roles. Nevertheless, one Intertek official boasted to Econoff at the opening ceremony that although this lab adds significant space to Intertek's south China toy testing capacity, the company's Shekou (Shenzhen) toy lab is larger and more advanced. But Duplicate Testing Increasing -------------- ¶3. (U) Despite this step forward in streamlining testing, south China's toy makers complain that they feel besieged by external safety and compliance mandates. Some large firms said the recently proposed Toy Safety Coordination Initiative (TSCI),proposed by the U.S. toy industry and standards body American National Standards Institute (ANSI),was similar to other standards but less strict than testing and safety requirements imposed by major U.S. buyers like Wal-Mart and Toys R Us. Several smaller firms and the Guangdong Toy Association complained that the new TSCI proposal would virtually duplicate China's safety standards for toys sold domestically (known as the China Compulsory Certification mark, or "3C" mark),raising the costs for toy makers, and possibly for consumers, by a large margin. Some testing firms also raised questions about the effect of U.S. state governments imposing their own safety requirements, potentially adding another layer of complexity to the current regulatory environment. Information Dissemination Needs Improvement -------------- ¶4. (U) Many toy manufacturers tell us they rely heavily on third-party testing organizations for information on new standards. Testing companies and the Guangdong Toy Association said they have dedicated staff working to obtain the latest safety requirements from importing countries, as well as dissemination strategies including seminars, postal mailings and email, websites and other forms of outreach. Many manufacturers and testing companies have told us of the need for more centralized release of standards information, complaining that China's General Administration of Quality Supervision and Quarantine (AQSIQ) and Ministry of Commerce (MOFCOM) do not seem well prepared to disseminate timely, accurate information to China's toy industry. ¶5. (U) China's authorities are reportedly taking a more active role in the area of soliciting industry comments to foreign standards GUANGZHOU 00000225 002 OF 002 changes. Toy makers and their industry association said AQSIQ and MOFCOM had translated proposed U.S. and EU regulations into Chinese and requested specific comments from industry through local CIQ offices. CIQ officials indicated to industry contacts that their comments would be conveyed to foreign governments deliberating new toy safety regulations. Calling Again for Harmonized Standards -------------- ¶6. (U) There is broad agreement among manufacturers and testing companies that standards harmonization between different countries and buyers would be the most effective strategy for increasing toy safety and reducing costs. They emphasized that under the current system there is no way to avoid conducting a separate battery of tests to demonstrate compliance with each set of standards. Many companies see the rapidly changing regulatory environment as a serious business challenge. Several pointed out that uncertainties over changing regulations could force toy makers to incur substantial new capital costs without assurance that the new regulations will stabilize in coming years. GOLDBERG