Tuesday, June 05, 2007

Europe's wonderful regulations

David Seaton's News Links
Europe's "superpower" secret weapon is its regulatory prowess. To create and enforce regulations that guarantee the quality, safety and healthfulness of an infinite number of products among 25 nations of disparate traditions is Europe's greatest gift to the contemporary world.

A friend of mine, a Spanish restaurateur, tells me that in his opinion the biggest effect of Spain's entry into the European Union has been the effect of EU regulations on the quality of common table wine and bulk olive oil. Before Spain's entry in the EU these products were produced in appalling sanitary conditions. And there was even a case of mass poisoning from tainted rape seed oil in 1981 which has caused the death of 3,000 people over the years and left 20,000 with permanently impaired health. The European Union's stringent regulatory apparatus that many find "interventionist" and anti-democratic with its "faceless bureaucrats in Brussels" has vastly improved the image of Spanish food and wines: especially the food and wine that average people consume daily.

In the USA thousands of pet owners are heart broken because their dogs and cats have died from eating tainted pet food "fillers" from China. In Panama dozens of people have died from brushing their teeth with poisoned, Chinese counterfeit, brand name toothpaste. A major mass poisoning of human beings in a developed country produced by fraudulent Chinese business practices could cast suspicion on all things Chinese and bring the Chinese economic "miracle" crashing to the ground.

In the maelstrom of globalization it is Europe's superior international regulatory capabilities that will ensure that millions will prefer products from the EU over all others.

When Fakery Turns Fatal - New York Times

Abstract: They might be called China’s renegade businessmen, small entrepreneurs who are experts at counterfeiting and willing to go to extraordinary lengths to make a profit. But just how far out of the Chinese mainstream are they? Here in Wudi in eastern China, a few companies tried to save money by slipping the industrial chemical melamine into pet food ingredients as a cheap protein enhancer, helping incite one of the largest pet food recalls ever. In Taixing, a city far to the south, a small business cheated the system by substituting a cheap toxic chemical for pharmaceutical-grade syrup, leading to a mass poisoning in Panama. And in the eastern province of Anhui, a group of entrepreneurs concocted a fake baby-milk formula that eventually killed dozens of rural children. The incidents are the latest indications that cutting corners or producing fake goods is not just a legacy of China’s initial rush toward the free market three decades ago but still woven into the fabric of the nation’s thriving industrial economy. It is driven by entrepreneurs who are taking advantage of a weak legal system, lax regulations and a business culture where bribery and corruption are rampant.(...) Counterfeiting, of course, is not new to China. Since this country’s economic reforms began to take root in the 1980s, businesses have engineered countless ways to produce everything from fake car parts, cosmetics and brand name bags to counterfeit electrical cables and phony Viagra. Counterfeiting rings are broken nearly every week; nonetheless, the government seems to be waging a losing battle against the operations.(...) But the discovery of dangerous ingredients in foods and drugs has raised more serious questions.(...) But agricultural workers and experts in this region tell a different story. They say the practice of doctoring animal and fish feed with melamine and other ingredients is widespread in China. And Wudi, they say, has long been known as a center for such activity. “Wudi became famous for fake fish powder almost 10 years ago,” said Chen Baojiang, a professor of animal nutrition at the Agricultural University of Hebei. (Fish powder is used as a protein additive to animal feed, including fish feed.) “All kinds of fillers have been used. At the beginning it was vegetable protein, then urea. Now it’s feather powder.”(...) For decades, small entrepreneurs have started out counterfeiting in emerging industries in China, seeking an early advantage and their first pot of gold. Often, they try to get around regulations, or simply believe small-time cheating that involves adding cheap substitutes or low-grade ingredients will not cause much harm. “Basically, for entrepreneurs, if something is not explicitly banned — it’s not banned,” said Dali Yang, who teaches at the University of Chicago and has studied China’s food safety regulations. “As long as people are not sick or dying, it’s O.K.”Experts say counterfeiters are now moving to outlying areas of the country, where it is easier to evade regulation. The counterfeiters are also moving into food and agriculture, which are difficult to monitor because they involve small farmers and entrepreneurs. Small-time entrepreneurs have played the same game over and over with other products, experts say, adding cheap substitute chemicals to toothpaste; using lower-grade materials to produce car parts, batteries and cellphones; and creating factories that specialize in counterfeit goods. Last year, for instance, pirates were caught faking an entire company, setting up a “branch” of the NEC Corporation of Japan, including 18 factories and warehouses in China and Taiwan. “We have to bear in mind they probably don’t think about the consequences at all,” said Steve Tsang, a China specialist who teaches at Oxford University. “They’re probably only thinking of making a fast buck.” READ IT ALL

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