New York Times: An Export Boom Suddenly Facing a Quality Crisis. Hoping to investigate why melamine contaminated so much pet food, investigators from the Food and Drug Administration spent two weeks in China this month. […] After United States investigators left, China issued a statement asking the United States not to punish other exporters of food ingredients for the misdeeds of a few rogue companies, and not to let this become a trade quarrel.
Somehow I am not convinced that only a few “rogue” companies were at fault. Nor was I convinced that the abuses at Abu Ghraib were the work of a few “rogue” soldiers. In both situations, the problem was that the culture and the environment permitted, and perhaps encouraged, such misdeeds to occur.
Now, what of this trade quarrel? The danger for all parties involved in the Chinese export trade isn’t a trade quarrel. Trade disputes are problems between nations that inevitably get resolved after protracted negotiations and political posturing. No, the real problem here is that not a quarrel with the U.S. government, but with the U.S. public. How do you resolve a quarrel with consumers who refuse to purchase your products? This is the type of situation that get ugly fast and not just for Chinese exporters.
How will American importers of Chinese products react? Knowing that the products you import are basically unregulated by the Chinese government, what steps must you take to ensure the safety of your own merchandise? Because all the dollars and cents you are saving by importing from China can vanish in a flash when your product sickens or kills someone. Punitive damages anyone?