The Triple Bottom Line Blog

Advocates of environmental and labor protections worry--with good reason--that globalization may drive a "race to the bottom" in which government regulations get watered down in the competition for world markets. But as this article in today's New York Times suggests, the process can sometimes operate in reverse. The story deals with the fallout from the recent stories of tainted foodstuffs and toothpaste being exported from China and the resulting loss of confidence on the part of foreign consumers. Key grafs:

While Beijing has strongly defended the quality and safety of its food and drug exports, and even denied that the toothpaste it exported was unsafe, government regulators at the same time have stepped up safety inspections and shut down companies accused of producing unsafe food or counterfeit drugs.

But with pressure growing from regulators in the United States, Europe and other parts of the world, and international food companies expressing concern about the risks of importing Chinese-made food and feed ingredients, Beijing is pushing for a more forceful response to the crisis.

In its announcement on Tuesday, which was posted on a government Web site, China said that the State Council had approved a new food and drug safety guarantee system on April 17 and that an outline of the program was being distributed to government agencies nationwide.

The government said in its announcement that it planned by 2010 to place new controls on food and drug imports and exports and to step up random testing on medicines. It also said that it would have information on inspections of 90 percent of all food products, although it was unclear how that would work.

There seems to be little doubt that Chinese food and drug safety standards have always been lax. But as long as only Chinese consumers were affected, the government had little incentive to act. (That's the sort of attitude that having dictatorial powers tends to encourage.) Nosy, noisy, demanding Westerners are another matter. Economic pressure from disgruntled Americans and Europeans may be having an impact on Chinese practices that domestic dissatisfaction never could.

This doesn't mean that globalization automatically leads to good results. That happens only when people care, are informed, and have mechanisms through which to act. Companies in the United States and elsewhere that are partnering with firms in China or using Chinese suppliers need to encourage these conditions. The sooner firms in China (and the rest of the developing world) can be prodded or pushed into applying world-class standards of product safety and quality, the better it'll be for the future of global trade.

Labels: China, Food and Agriculture, globalization