Policy debaters have a U.S./China policy resolution and Texas UIL has a Spring Lincoln-Douglas topic: RESOLVED: In matters of international trade, globalization ought to be valued above protectionism

Screen Shot 2017-04-11 at 9.47.32 AMLast week I purchased a fire pit for a friend. It was $125 delivered by Amazon…from China. Should I have instead have tried to purchase a similar fire pit made in the U.S.A.? Well, money was an issue. “Fire Pit” wasn’t in my April budget nor in my friend’s budget. We could have dug a hole in the yard and lined it with bricks. But a portable fire pit for the patio seemed preferable.

Amazon kept part of the $124.94 to cover delivery costs, hosting item and transacting the sale. Plus Best Choice Products, a Southern California company (originally Sky Billiards) kept a slice to cover their costs and (hoped for) profits for importing this fire pit from somewhere in China.

Screen Shot 2017-04-11 at 11.23.59 AMWho is hurt when Americans buy portable fire pits or other products from China? People in China purchase iPhones and other name- brand goods from the U.S. Japan, and Europe and buy food from Kentucky Fried Chicken, Starbucks, and McDonalds. “Mapping China’s middle class,” (McKinsey & Co.) reports Chinese middle income consumers will soon expand to three-times the size of American baby-boomers:

China’s new middle class also divides into different generations, the most striking of which we call Generation 2 (G2). It comprised nearly 200 million consumers in 2012 and accounted for 15 percent of urban consumption. In ten years’ time, their share of urban consumer demand should more than double, to 35 percent. By then, G2 consumers will be almost three times as numerous as the baby-boomer population that has been shaping US consumption for years.

Economists over the last two hundred and fifty years have consistently made the case for open international trade and against policies of mercantilism and protectionism. Critics often label economists advocating international trade as pro-business or “corporate shills.”

Adam Smith argued much the opposite in “The Wealth of Nations.” Smith argued the benefits to consumers of international trade are fairly obvious: opportunities to purchase a wider variety of goods, often at lower prices. Smith

Taking a dark view of globalization is this post drawn from a recent “BBC broadcast, a ‘Dinner Party Conversation’ on the question of whether globalisation is dead?” The post offers counter arguments research arguing that international investment, trade, and migration are the reason world poverty has fallen so dramatically:

Moreover, while it is true that poverty has fallen worldwide, the phenomenon cannot be wholly attributed to financial liberalisation or globalisation, but instead to advances in e.g. medical science and scientific development. Indeed, the numbers of those living on less than $1 a day fell most rapidly, not during the period of financial globalisation, but between 1950 and 1970 according to Bourgignon and Morrison (see Our World in Data, on global extreme poverty).

 

This Cato Institute post, “What Globalization Isn’t,” (July 6, 2016) tried to separate out “false song globalism” from the decades of gains from market-based international trade and investment:

The Peterson Institute for International Economics estimates that past gains from U.S. trade and liberalization of investment range from $9,270 to $16,842 per household. Another study found that that “a 1 percent increase in trade raises real income by 0.5 percent.” Other research finds that the trade flowing from globalization has increased consumer purchasing power for middle-income households by 29 percent. As for the poor, they benefit most from the availability of low-cost goods, seeing as much as a 62 percent increase in purchasing power over what they would have in a world without trade.

Looking for downsides, the HBR article asks: “Did Trade with China Make U.S. Manufacturing Less Innovative?” (December 8, 2016). International competition can spur U.S. firms to innovate, but sometimes a cost cliff can be so steep, domestic firms just abandon markets to imports. The HBR article cites new research:

Was increased trade with China really pushing U.S. companies to become more innovative? For manufacturers, at least, they found that the answer was no. In fact, the relationship went in the opposite direction: U.S. manufacturers exposed to competition from Chinese imports became far less innovative. …

The first takeaway from this paper is that more competition, from trade or otherwise, doesn’t necessarily lead to more innovation. While competition can force firms to innovate to fend off rivals, it can also cut profit margins, leaving companies with less to invest in research and development.

So for both policy and Lincoln-Douglas debaters there are arguments, claims, and research on all sides of the globalization debate. It’s worth taking the long view though, international trade has extended for all human history and brought both benefits and costs.  The Economists offers a nice overview: “When did globalisation start?” (September 23, 2013):

Some see globalisation as a good thing. According to Amartya Sen, a Nobel-Prize winning economist, globalisation “has enriched the world scientifically and culturally, and benefited many people economically as well”. …

Others disagree. Globalisation has been attacked by critics of free market economics, like the economists Joseph Stiglitz and Ha-Joon Chang, for perpetuating inequality in the world rather than reducing it.

After a discussion of economic history of global trade, The Economist takes a long view:

But it is clear that globalisation is not simply a process that started in the last two decades or even the last two centuries. It has a history that stretches thousands of years, starting with [Adam] Smith’s primitive hunter-gatherers trading with the next village, and eventually developing into the globally interconnected societies of today. Whether you think globalisation is a “good thing” or not, it appears to be an essential element of the economic history of mankind.

For LD debaters, is there a value in protecting U.S. fire pit manufacturers from global competition? With choices limited by fire pit tariffs, would people purchase a more expensive U.S. versions? Spending more on U.S. fire pits leaves consumers less to spend on other goods and services, and/or less to put aside as savings.

U.S. fire pits could be manufactured less expensively if tariffs on steel from China were lower. “China upset at high US tariffs on steel imports: Punitive tariffs announced after conclusion of anti-dumping and anti-subsidy investigations,” (South China Morning Post, February 4, 2017):

The US Commerce Department announced earlier this week it would impose punitive tariffs ranging from 63.86 per cent to 190.71 per cent on China’s stainless steel products after concluding anti-dumping and anti-subsidy probes.

Also see “U.S. Steelmakers Press Their Luck With Price Increases,” (Wall Street Journal, April 10, 2017):

Domestic steel companies have raised prices by as much as 50% on popular types of steel in recent months. That has boosted their profits, but troubled customers who say they can’t afford the higher cost. Steel users say they are looking for cheaper alternatives from countries unaffected by the tariffs.

Prehistoric people likely brought fire and fire-making tools with them as they traveled the world. Post-historic people trade fire pits instead.
— Greg Rehmke

 

shenzhenlight-391221_1280

Shenzhen

Should the U.S. encourage China to further decentralize economic and political authority? Soft or full partition has been advocated for Iraq, Syria, and Libya. The politically-decentralized canton-nation of Switzerland, and past and modern city-states show the success of devolving political authority.

Hong Kong and Taiwan, followed by Chinese SEZs like Shenzhen and Shanghai Pudong New Zone, are now the most free and prosperous places in greater China.

Political decentralization is in the news with English voters choosing (just barely) to exit the European Union. Before the last election, when most expected Hillary Clinton to win, Texas citizens and politicians openly called for a similar Texit (see: “From Brexit to Texit? Renewed calls for Texas secession after EU vote,” (CBS News,” June 25, 2016).

Donald Trump unexpectedly won, which led many in California to call for “Calexit” instead: “‘Calexit’ movement says Trump win helps their calls for California to secede,” (LA Times, November 9, 2016).

Stephen Greenhut, though against ‘Calexit,’ outlines reasons for smaller Californias: “California break-up idea won’t go away — for good reason,” (Orange County Register, April 9, 2017):

California’s approximately 39 million population equals the total combined population of the nation’s 22 smallest states. I can regale you with geographic trivia, but the closer you look, the harder it is to fathom why talks of breaking up California are not taken more seriously. California is too large in size and population to be governed fairly.

Though he is a libertarian, Greenhut argues the problem is one of political philosophy not political ideology:

In California, we have one Assembly member for every 483,000 residents. That’s the worst ratio in the country. In New Hampshire, which has the best ratio, there are approximately 3,200 residents for every member of the statehouse. What are your chances of influencing or even reaching your legislator — or even his or her staffers — in California?

In a state as big as ours, only the big guys — the political parties, labor unions and other special interests — matter. Breaking up one mega-state into multiple reasonably sized states, where people with like-minded interests can better govern themselves, is a great idea that gives voters more power. If that won’t happen, then we at least need more representative districts.

Breaking up California or Texas into smaller states offers many political and economic advantages. Texas already has an okay to break itself up. “The Five States of Texas,” (D Magazine, July 2009) notes Texas can’t draw on the U.S. Constitution to succeed, but:

What Texas could do, however, is divide itself into as many as five states, a privilege given to it as a unique condition of its annexation to the Union in 1845. For Dallas-Fort Worth, this is a no-brainer: North Texas produces a disproportionate amount of revenue for the state, and it would get to keep that money in a state where Dallas is the capitol.

Economically, then, it would be a huge benefit to the area. But politically, what would Texas as a whole look like if it chose to do this? Would dividing a large, red state into five smaller, reddish states benefit Republicans in the Senate? In the Electoral College?

Back to political decentralization in China, this page, “China’s Special Economic Zones,” offers a valuable outline and history of China’s SEZs. And here is 2011 World Bank post on SEZ Success and Challenges.

Just this month China launched a new SEZ, “China to launch special economic zone in province hit by layoffs,” (April 3, 2017):

The Xiongan New Area, about 100 kilometers from Beijing, will house “non-capital functions” moved from the capital city. This is part of a wider initiative to support the economy, and to integrate Hebei with the capital city and nearby Tianjin, according to state media. …

Ones that have fared better were in Shenzhen and Shanghai. Established in 1980, the Shenzhen special economic zone helped jumpstart reforms and turned the fishing village into today’s manufacturing and high-tech center, while the Pudong area in Shanghai is now a major financial center.

See also, “China Hopes Xiongan New Area Will Relieve Pressure On Congested Beijing,” (Forbes, April 9, 2017)

This Economist article is skeptical of SEZs: “Political priority, economic gamble,” (April 4, 2015):

Special economic zones (SEZs) are all the rage among governments hoping to pep up their trade and investment numbers. Such havens are appearing even within havens: the Cayman Islands has a new one. “Any country that didn’t have [an SEZ] ten years ago either does now or seems to be planning one,” says Thomas Farole of the World Bank.

How can U.S. policy reforms best embrace and encourage the advantages of political and economic decentralization, innovation, and competition? For students debating the U.S./China resolution, could U.S. policy reforms engage Chinese SEZs is ways similar to US policy toward Chinese city-states like Hong Kong. Taiwan, and Singapore?

The Independent reports “Ford to launch plug-in electric car in China as Beijing lays out strict air pollution rules to combat smog,” (April 6, 2017). (See also: “Ford to Make Electric Cars in China Amid Green Drive,” Wall Street Journal, April 7, 2017).

Screen Shot 2017-04-07 at 4.23.10 PMElectric cars offer many advantages, but reducing pollution isn’t always one of them. Instead, electric cars shift the point of pollution to the electricity source. So electric cars charged in the Pacific Northwest draw power from very clean hydroelectric dams. Electric cars in California can require importing more power from coal burning plants in other states.

Electric cars sold in the U.S., China, and E.U. receive significant government subsidies. Yet “Electric cars and the coal that runs them” (Washington Post, November 23, 2015), notes:

…Thanks to generous tax incentives, the share of electric vehicles has grown faster in the Netherlands than in nearly any other country in the world.

But behind the green growth is a filthy secret: In a nation famous for its windmills, electricity is coming from a far dirtier source. Three new coal-fired power plants, including two here on the Rotterdam harbor, are supplying much of the power to fuel the Netherlands’ electric-car boom.

A Wired article on Tesla’s electric cars (March, 31, 2016) explains:

Your electric car doesn’t need gas, but it still might get its energy from burning carbon. It depends on how your local grid generates electricity. “If you use coal-fired power plants to produce the electricity, then all-electrics don’t even look that much better than a traditional vehicle in terms of greenhouse gases,”  … But if your local grid incorporates a fair amount of renewable solar and wind energy, like California, your electric vehicle is pretty clean.

So electric cars in California can be clean on sunny, windy days, and less clean when the grid draws power from out-of-state sources (up to 50% from burning coal). California doesn’t generate much energy from coal, but does import a lot. “UPDATE: California’s quiet market for coal,” SNL (October 12, 2015):

In 2014, less than 5% of California’s total energy demand was served by coal and petroleum coke-fired plants, nearly all of it from plants outside the state, according to an Oct. 12 report from the California Energy Commission. By 2026, California will end virtually all its reliance on coal.

But at times, as much as 50% of Southern California’s electricity still comes from coal-fired plants, Steve Homer, director of project management for the Southern California Public Power Authority, or SCPPA, told SNL Energy.

Back to the China story, generating electricity from coal in United states power plants is far less polluting than electricity from coal in China. “In Coal-Powered China, Electric Car Surge Fuels Fear of Worsening Smog,” (Reuters, January 27, 2016) reports:

A series of studies by Tsinghua University, whose alumni includes the incumbent president, showed electric vehicles charged in China produce two to five times as much particulate matter and chemicals that contribute to smog versus gas-engine cars. Hybrid vehicles fare little better.

“International experience shows that cleaning up the air doesn’t need to rely on electric vehicles,” said Los Angeles-based An Feng, director of the Innovation Center for Energy and Transportation. “Clean up the power plants.”

The key policy point is the upgrade power plants before pushing (subsidizing) electric cars:

Tsinghua’s studies call into question the wisdom of aggressively promoting vehicles which the university said could not be considered environmentally friendly for at least a decade in many areas of China unless grid reform accelerates.

In addition to the problem of electricity source pollution are infrastructure challenges. “California bets on electric cars, at ratepayer risk,” (San Diego Union Tribune,  February 7, 2017), asks:

Should all utility consumers subsidize the wealthier few who like to drive electric cars?

It’s hardly a fair question. Yet that’s what the California Public Utilities Commission will eventually have to decide, now that utilities have proposed a $1 billion plan to build and effectively own the state’s retail charging network of tomorrow.

New charging stations cost money, and so does the renewable power generation grid:

… a second problem created mostly in California, a serious glut of renewable energy. Starting in 2006, lawmakers ordered utility consumers to subsidize rapid increases in wind and solar energy production.

Today the state has as much as 50 percent more power available than needed on a sunny, windy winter afternoon. And then, when the sun goes down or weather causes production to drop, fossil-fuel plants fire up because batteries are too expensive.

China where average incomes are much lower than California, has more severe infrastructure problems for charging electric cars. “What’s Driving The Electric Car Trend In China?,” (NPR Morning Edition, December 14, 2015 ) reports on government subsidies in boosting electric car sales in China. Yang Zhou discusses his new car:

ZHOU: I bought a hybrid model from a Chinese carmaker called BYD. And it stands for Build Your Dreams. I paid $24,000 for the car. And that’s 30 percent off the sticker price. But I paid no purchase tax. And the best thing that comes with the car is a free Shanghai license plate, which is worth $13,000.

Zhou explains that this special license plate allows him to rush-hour access to less-congested elevated Shanghai highways. But he also complains that charging his car is difficult:

ZHOU: I have to admit that charging the car is really a hassle. Every time I do it, I have to lower an extension cord from my apartment, which is on the 11th floor. …

ZHOU: Oh, yeah, it’s very long. And it’s really heavy (laughter). It takes seven hours to charge the car. And the car can drive 40 miles on one charge. But fortunately, I don’t have to charge the car every day. But I do expect that the infrastructure for these kind of vehicles will get better over time because China’s government has planned to build 12,000 charging stations by the year 2020.

Building 12,000 charging stations will be another expense, and money that could have been used to modernize Chinese coal power plants instead of catering to already-subsidized electric car buyers.

Shanghai does have a showcase clean coal plant. “China hopes Shanghai clean coal plant sets example,” (PEi, August 23, 2016) and “China’s drive to clean up its coal power, one plant at a time,” (New Scientist, August 22, 2016).

Yet coal still accounts for about two-thirds of China’s energy provision, and more than 200 new coal plants have been given the go-ahead. Globally, too, coal demand and production are forecast to grow until at least 2040.

Technology that improves coal-burning efficiency could be useful for retrofitting older power plants, and cut down their emissions.

Even with expanded wind and solar power in China, coal will continue to be a major power source for its expanding electric car users.

Charles C. Mann’s “Renewables Aren’t Enough. Clean Coal is the Future,” (Wired, March 25, 2014) looks at high technology coal power development in China:

GreenGen is a billion-dollar facility that extracts the carbon dioxide from a coal-fired power plant and, ultimately, will channel it into an underground storage area many miles away. Part of a coming wave of such carbon-eating facilities, it may be China’s—and possibly the planet’s—single most consequential effort to fight climate change. …

China, like most of the rest of the world, “pretty much has to use coal,” says Dean, the fuel analyst. “Or, I guess, leave people in the dark.” And since coal is not going away, coal plants around the world will need to find a way to capture and store their emissions. “It’s just crazy not to develop this technology.”

An earlier post “For Still-Poor China, Coal Pollution from Home Heating,” reviewed the challenges of China’s antiquated coal-power plants, especially those for home heat.

And here’s a short video of electric car charging challenge from South Africa.

From China Daily (March 24, 2017), “Dynamic national spirit drives China’s growth,” a discussion of The Complacent Class: The Self-Defeating Quest for the American Dream:

Tyler Cowen’s latest book has struck a nerve in the United States. He sees a failure of spirit underlying the many worrying trends his country has seen over the last 40 years – the lack of wage growth, declining life expectancy in some groups, increased inequality, growing monopolization of the economy, increasing racial and income segregation in schools and housing. …

Screen Shot 2017-03-30 at 8.00.30 AMCowen, a frequent visitor to China, is a well-known free-market-oriented professor of economics at George Mason University in Fairfax, Virginia, near Washington, D.C. His book – The Complacent Class: The Self-Defeating Quest for the American Dream – has provoked widespread discussion and has been reviewed and analyzed in all the leading newspapers and policy journals.

Cowen contrasts complacency in the U.S. with continued dynamism in China:

In contrast to his worries about the US, he writes: “Even with its recent economic troubles, China has a culture of ambition and dynamism and a pace of change that harkens back to a much earlier America. China, even though in the midst of some rather serious economic troubles, makes today’s America seem staid and static. For all its flaws, China is a country where every time you return, you find a different and mostly better version of what you had left the time before.”

Cowen sees a “make China great again” spirit than unifies elites and everyday people across China. Chinese people know the distant history of their country as leading the world in culture, agricultural productivity, and technology.

China has an advantage similar to America in the 1950s and 1960s where so many grew up poor and focused on working to get ahead. America’s Great Depression from 1929 to 1939 impoverished tens of millions and was followed by World War II.

After World War II, incomes and productivity improved across the U.S. economy through the 1950s and 1960s much as income and productivity across China has grown over the last three decades.

The China Daily on Cowen’s book continues:

He says that his experience at George Mason University leads him to believe that much of China’s dynamism comes from the opportunities it offers to non-elite young people.

“It is striking to me how many of the good Chinese students in the US come from rural areas and do not have very wealthy parents. They are not typically from the poorest families, but they are not just from the elite families in Shanghai.

“Part of it is the exam system. I think that for all the talk of corruption, China is fairly meritocratic in the sense that a smart person from a middle-class or poor family really can rise a great deal.”

More on The Complacent Class here (Mercatus Center event audio).

Many posts on China issues on Cowen’s MScreen Shot 2017-03-30 at 8.28.39 AMarginalRevolution blog.

And “Learn more about China” posts and links on Marginal Revolution University page.

Food safety is always a challenge. Insuring food safety from suppliers in distant countries like China is even more of a challenge. “Blockchain: A Better Way to Track Pork Chops, Bonds, Bad Peanut Butter?,” (New York Times, March 4, 2017) report new applications of Bitcoin’s Blockchain to food security:

Frank Yiannas has spent years looking in vain for a better way to track lettuce, steaks and snack cakes from farm and factory to the shelves of Walmart, where he is the vice president for food safety. When the company dealt with salmonella outbreaks, it often took weeks to trace where the bad ingredients came from.

Then, last year, IBM executives flew to Walmart’s headquarters in Arkansas to propose a solution: the blockchain.

Blockchain, the encryption protocol backing Bitcoin security is deployed for supply chain security. Modern manufacturing as well as food production is often spread across a wide network of suppliers around the world. All major companies from Ford and Toyota to Nike and Walmart hire third-party certification services both to monitor quality standards and working conditions with suppliers.

Nike never wants their shoes made by untraceable factories using low-quality materials, nor face news stories of Nike subcontractor factories with unsafe working conditions. Similarly Walmart and other companies selling food want to certify standards and safety from the original farms, through processing and distribution.

Blockchain provides an accounting system that makes it hard for later links in the supply chain to falsify earlier links (to hide low-cost unapproved suppliers, for example).

Nearly half a trillion dollars world of goods were shipped (or flown) from China to the US in 2016, and a significant part of the cost is documenting these goods. Maersk is a major shipping firm facing this challenge:

For Maersk, the problem was not tracking the familiar rectangular shipping containers that sail the world aboard its cargo ships — instead, it was the mountains of paperwork that go with each container. Maersk had found that a single container could require stamps and approvals from as many as 30 people, including customs, tax officials and health authorities.

…The cost of moving and keeping track of all this paperwork often equals the cost of physically moving the container around the world.

What’s more, the system is rife with fraud. The valuable bill of lading is often tampered with or copied to let criminals siphon off goods or circulate counterfeit products, leading to billions of dollars in maritime fraud each year.

Shipping fraud leads to food safety risks for companies like Walmart (and, of course, for customers).

FDA and USDA food safety agencies, apart from turf fights with each other, are challenged by incentive, information, and budget issues.

FDA/USDA Catfish fights offer a turf-war example. “Senate votes to end USDA catfish inspections, which just got underway,” (Food Safety News, May 26, 2016)

The U.S. Senate has voted to shut down the nation’s only catfish inspection program, a move that would put more Americans at risk of exposure to carcinogens and antibiotics from Asian white fish, such as Vietnamese pangasius.

…If it passes the House, it would still have to be signed by President Obama before the U.S. Department of Agriculture (USDA) catfish inspection program would be shut down. If that happens, catfish would likely revert back to the U.S. Food and Drug Administration (FDA), where only 1 to 2 percent of seafood imports are inspected because of budget constraints.

Sounds scary, but Food Safety News has its own perspective and bias, according to a NPR story discounting a Food Safety News scare story on supermarket honey, “Relax, Folks. It Really Is Honey After All,”

Maybe we’re too inclined to believe the worst about supermarket food.

How else to explain the reaction to a recent report about honey on the web site Food Safety News? Food Safety News is published by a lawyer who represents plaintiffs in lawsuits against food manufacturers and processors.

The post, by journalist Andrew Schneider, claimed that most honey on supermarket shelves isn’t really honey. As evidence, the site cited tests showing that there is no pollen in most of that honey. (Raw honey contains lots of pollen, which bees collect along with the nectar that they turn into honey.)

The Food Safety News story in NPR post focused on allegedly unsafe honey from China:

The article implied that this was part of a deliberate attempt to prevent anyone from detecting illicit honey from China. (The United States blocks imports of Chinese honey because U.S. officials decided that it was being sold at artificially low prices, undercutting American honey producers.) Schneider also reminded his readers that Chinese honey has had a history of safety problems, including contamination with banned antibiotics and lead.

This 2011 NRP story is valuable for its in-depth research on the honey industry, and gives a glimpse of the way many food safety scares (and lawsuits) develop.

One avenue to incentivize companies to keep food safe is to avoid expensive litigation and awards to customers hurt by unsafe food. Bad publicity provides a powerful incentive as well, as Chipote management and stockholders learned recently.

Most of economics is about incentives, and it is an open debate whether food safety regulations, potential litigation, or fear of bad publicity plays the larger role in maintaining and improving food safety. Critics of the FDA and USDA regulatory approach focus in agency incentives.

Government agencies suffer from incentive and information problems that slow innovation and hamper alternative food safety systems. Students have an opportunity to research the dozens of food safety certification systems that have developed to protect consumers.

A major concern with both domestic and imported food is possible overuse or misuse of pesticides and herbicides. Interesting to see how significantly U.S. pesticide and herbicide use has fallen, even as agricultural production has increased:

May 2014, the National Agricultural Statistics Service at the U.S. Department of Agriculture (USDA) issued its comprehensive report Pesticide Use in U.S. Agriculture. The agency found that herbicide usage peaked at 478 million pounds in 1981—a decade and half prior to the introduction of the first biotech crop varieties—and fell to 394 million pounds in 2008. So instead of the massive increase in herbicide spraying claimed by Benbrook, the USDA actually reports a modest decline. Insecticide applications peaked in 1972 at 158 million pounds, dropping to 29 million pounds in 2008. [Source: Chipotle Treats Customers Like Idiots, Aug./Sept. 2015 Reason]

For more on certification and regulation, here is a 2011 post on Certified Humane discussing the debate over expanded federal regulation and inspection of food, and critical of the claim that private sector food producers and importers can “self police.”

The Chairman of the Appropriations House Subcommittee, Jack Kingston (R-GA) said, “The food supply in America is very safe because the private sector self-polices, because they have the highest motivation.  They don’t want to be sued, they don’t want to go broke. They want their customers to be healthy and happy.”

The Centers for Disease Control (CDC) estimates that 28,000 Americans are hospitalized every year and 3,000 die every year from tainted food.

Even the Grocery Manufacturers of America are in support of doubling the FDA’s food safety budget, in light of the recent food scandals.Rep. Kingston also claims the high level of food safety is due to the private sector without the “nanny” state.  “That’s the private sector working,” he’s quoted as saying.

In reality, do you want to risk your life and the lives of your families on Rep. Kingston’s fantasy?  We saw the result of   de-regulation and lack of oversight in the financial sector, as we watched homes being foreclosed and savings and pension plans evaporating

If you want the FDA and the Food Safety Inspection Service at USDA fully funded, please write your Senators and let them know they need to put the funding back to provide us with safe food oversight. …

According to the article, increased federal funding for FDA and USDA inspectors could save lives, and those who say the private sector can “self-police” to keep food safe are living in a fantasy world.

However, today’s food industry relies on independent food safety certification organizations. These are generally NGOs (non-government organizations) that are in compliance with regulatory agencies like the FDA and USDA.

Here is page for Global Food Safety Initiative (GFSI) Certification with this introduction:

Due to complex challenges in today’s food supply chain, many of the world’s largest food retailers are mandating supplier certification to Global Food Safety Initiative (GFSI) schemes, which include SQF, BRC, IFS, FSSC, GLOBALG.A.P. and BAP and CanadaGAP.

NSF companies are the leading global certifier to GFSI benchmarked standards, with exceptional technical expertise, consistently calibrated auditors and capacity for a timely path to certification.

GFSI was established to ensure confidence in the delivery of safer food to consumers, while continuing to improve food safety throughout the supply chain.  These global standards address food, packaging, packaging materials, storage and distribution for primary producers, manufacturers and distributors.

So Third-Party Certification is key. Big grocery chains like Kroger and Safeway would like to believe the farms and food-processors who deliver food to their shelves each day have clean and modern facilities with strict procedures to keep equipment clean and free of microbes. However, the food industry runs on “trust, but verify.” They can’t afford to just believe what suppliers claim nor can most afford to hire their own inspectors to investigate each supplier.

Companies can’t just rely on government agencies like the FDA or USDA since they can be sued when customers are hurt even when they comply with federal regulations. FDA and USDA tend not to be up to speed with the latest technologies and data analytics.

So, instead, private sector firms rely on certification. Here is the NSF page: What Is Third-Party Certification?

Third-party certification means that an independent organization has reviewed the manufacturingScreen Shot 2017-03-24 at 9.14.48 AM process of a product and has independently determined that the final product complies with specific standards for safety, quality or performance. This review typically includes comprehensive formulation/material reviews, testing and facility inspections. Most certified products bear the certifier’s mark on their packaging to help consumers and other buyers make educated purchasing decisions.

NSF Certification
Recognized by regulatory agencies at the local, state, federal and international level, NSF certification demonstrates that a product complies with all standard requirements. NSF conducts periodic facility audits and product testing to verify that the product continues to comply with the standard. See the complete NSF product listings.

NSF’s programs include testing and certifying drinking water treatment products and water filters, commercial food service equipment and a wide array of consumer products such as bottled water, nutritional supplements, private label goods, personal care items and home appliances (washers, dryers and dishwashers).

Why Do Companies Seek NSF Certification?
Independent, third-party testing and certification through NSF helps organizations:
• Demonstrate compliance with national or international standards and regulations• Demonstrate independent validation and verification of their commitment to safety and quality  • Increase credibility and acceptance with retailers, consumers and regulators  • Benefit from enhanced product quality and safety

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