776 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 34 days left until Election Day.
The Cato Institute published its study of the Foreign Manufacturers Legal Accountability Act yesterday entitled: "'Consumer Safety' Bill Could Boomerang Against U.S. Manufacturers". I have written about this latest self-destructive attack by Congress on our economy many times in the past.
[I am beginning to think of this Congress as some form of national auto-immune disease. Is there a pill we can take to get rid of it? If only . . . . The "pill" is called voting on November 2nd.]
Here's the conservative think tank's take on this legislation in a nutshell:
"Americans damaged by faulty products, whether made abroad or domestically, should be able to seek compensation through the courts. But the approach advocated by supporters of the FMLAA would not solve the problem. It would create a false hope of collection for damages while bypassing existing procedures that have proven to work in most cases. The approach would potentially violate constitutional protections available to citizens and non-citizens alike as well as existing commercial agreements with other nations. It could potentially disrupt global manufacturing supply chains, putting American production and employment in jeopardy."
Now that's a good reason to vote sponsor Betty Sutton (D-OH) back into office, isn't it?
But then there's the inflamed EU, Canada, WTO, importers, blah blah blah. Who cares? Not this Congress. I am told now that the FMLAA will not be addressed before the Election, but watch out for the lame duck session.
Nice of Congress to keep us on our toes with threatening legislation pending all the time. Really nice. I wonder if there's time to send out another solicitation for funds for the Republicans tonight . . . .
Showing posts with label Foreign Manufacturers. Show all posts
Showing posts with label Foreign Manufacturers. Show all posts
Wednesday, September 29, 2010
Sunday, September 26, 2010
CPSIA - Congressional Terror Campaign Continues (FMLA)
773 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 37 days left until Election Day.
Don't worry, your Congressional tormentors haven't tabled their latest effort to terrorize you, the Foreign Manufacturers Legal Accountability Act. We understand that the Congressional Democrats are still trying to make a "deal" on this terrible law. It's not going away even if you have put it out of your mind.
It doesn't matter that that this law violates WTO rules. it doesn't matter that it is flagrantly protectionist legislation that may trigger a trade war. It doesn't matter that it pissed off the EU, as previously reported in this space. It doesn't matter that we will lose critical vendors. It doesn't matter that we will face retaliatory legislation in other districts, effectively cutting off foreign markets for our export efforts.
All that matters is that Rep. Betty Sutton needs to look heroic to her constituents - the bill is a gift to her. She is fighting for her political life in this Midterm election and your petty concerns pale compared to the needs of the Congressional Democratic majority position. And you thought the politicians worked for you. It may be the other way 'round.
The latest sign of the cost of this self-destructive act is the inflamed outrage of our closed trading partner, Canada. For some reason, Canadians aren't too psyched up about being subject to class action lawsuits in this country. Weird, you'd think they would LOVE it. . . .
" . . . Canadian Trade Minister Peter Van Loan says the 'badly crafted' bill could end up side-swiping Canadian exporters, even though U.S. officials insist Canada isn't the intended target. 'There are enough thinking people that realize that this is a badly crafted bill that causes harm to a whole bunch of people,' Van Loan said Thursday."
No sense of humor up north, eh? How can those Canadians act so superior, criticizing the handiwork of our very own Democrat-dominated Congress? Badly crafted legislation? Please! Never heard of such a thing.
"Van Loan says the Canadian government is holding out hope the bill won't reach a vote before Congress adjourns in the coming weeks. 'If it gets voted on, the charged political environment means it will almost certainly pass, because you can't be seen voting to protect people dumping toxic drywall from China and stuff like that in your country,' said the minister. The [Canadian] government is keeping 'all options' open if the bill passes, but would likely seek a waiver similar to the Buy American exemption, he said." [Emphasis added]
Congress giving a gift to itself with self-destructive legislation, and a major trading partner implicitly threatening retaliatory legislation. Wow, we have a great government, don't we?
Is anyone besides me TIRED of being the object of continuing terrorist attacks by our OWN government?
When can I start to vote? Someone please help me . . . .
Don't worry, your Congressional tormentors haven't tabled their latest effort to terrorize you, the Foreign Manufacturers Legal Accountability Act. We understand that the Congressional Democrats are still trying to make a "deal" on this terrible law. It's not going away even if you have put it out of your mind.
It doesn't matter that that this law violates WTO rules. it doesn't matter that it is flagrantly protectionist legislation that may trigger a trade war. It doesn't matter that it pissed off the EU, as previously reported in this space. It doesn't matter that we will lose critical vendors. It doesn't matter that we will face retaliatory legislation in other districts, effectively cutting off foreign markets for our export efforts.
All that matters is that Rep. Betty Sutton needs to look heroic to her constituents - the bill is a gift to her. She is fighting for her political life in this Midterm election and your petty concerns pale compared to the needs of the Congressional Democratic majority position. And you thought the politicians worked for you. It may be the other way 'round.
The latest sign of the cost of this self-destructive act is the inflamed outrage of our closed trading partner, Canada. For some reason, Canadians aren't too psyched up about being subject to class action lawsuits in this country. Weird, you'd think they would LOVE it. . . .
" . . . Canadian Trade Minister Peter Van Loan says the 'badly crafted' bill could end up side-swiping Canadian exporters, even though U.S. officials insist Canada isn't the intended target. 'There are enough thinking people that realize that this is a badly crafted bill that causes harm to a whole bunch of people,' Van Loan said Thursday."
No sense of humor up north, eh? How can those Canadians act so superior, criticizing the handiwork of our very own Democrat-dominated Congress? Badly crafted legislation? Please! Never heard of such a thing.
"Van Loan says the Canadian government is holding out hope the bill won't reach a vote before Congress adjourns in the coming weeks. 'If it gets voted on, the charged political environment means it will almost certainly pass, because you can't be seen voting to protect people dumping toxic drywall from China and stuff like that in your country,' said the minister. The [Canadian] government is keeping 'all options' open if the bill passes, but would likely seek a waiver similar to the Buy American exemption, he said." [Emphasis added]
Congress giving a gift to itself with self-destructive legislation, and a major trading partner implicitly threatening retaliatory legislation. Wow, we have a great government, don't we?
Is anyone besides me TIRED of being the object of continuing terrorist attacks by our OWN government?
When can I start to vote? Someone please help me . . . .
Sunday, August 22, 2010
CPSIA - EU Warns on Foreign Manufacturers Legal Accountability Act
738 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are 73 days left until Election Day.
The EU has served notice of its objections to Henry Waxman's latest brainstorm, the Foreign Manufacturers Legal Accountability Act of 2010. This profoundly misconceived bill, championed by leftist consumer groups for its supposed benefits to consumers while ignoring the real problems likely to cripple commerce, has garnered increasing corporate interest in recent weeks. With more and more attention being given to persistent job losses and anemic (if any) economic growth, this bill seems suicidal. That apparently is no deterrent to our saviors, the Democratic majority in Congress. Reliable sources tell me that this bill will resume its relentless march toward law upon the return of Congress to Washington later this Fall (before Election Day).
Don't mistake this bill for good policy. We have gone over the many unforgivable flaws of this legislation in this space in the past. It is starkly anti-small business and is an economic depressant. The likely impact would be akin to a trade barrier tariff and could be this generation's version of Smoot-Hawley. It is also almost certainly a flagrant violation of the WTO and would trigger retaliatory regulations in our principal export markets. Trade war - just what we need . . . since export sales is about all that's working here now. Small business owners, please consider the impact on your export business if you need to set up registered agents in 50, 60, 70 countries. Think of the legal fees, think of the potential litigation that would be invited. How many such markets would you close?
There's more cooking in Congress to "help" us this election season. These guys are going to keep trying to "save" you until you save yourself on Election Day. Stay tuned.
The EU has served notice of its objections to Henry Waxman's latest brainstorm, the Foreign Manufacturers Legal Accountability Act of 2010. This profoundly misconceived bill, championed by leftist consumer groups for its supposed benefits to consumers while ignoring the real problems likely to cripple commerce, has garnered increasing corporate interest in recent weeks. With more and more attention being given to persistent job losses and anemic (if any) economic growth, this bill seems suicidal. That apparently is no deterrent to our saviors, the Democratic majority in Congress. Reliable sources tell me that this bill will resume its relentless march toward law upon the return of Congress to Washington later this Fall (before Election Day).
Don't mistake this bill for good policy. We have gone over the many unforgivable flaws of this legislation in this space in the past. It is starkly anti-small business and is an economic depressant. The likely impact would be akin to a trade barrier tariff and could be this generation's version of Smoot-Hawley. It is also almost certainly a flagrant violation of the WTO and would trigger retaliatory regulations in our principal export markets. Trade war - just what we need . . . since export sales is about all that's working here now. Small business owners, please consider the impact on your export business if you need to set up registered agents in 50, 60, 70 countries. Think of the legal fees, think of the potential litigation that would be invited. How many such markets would you close?
There's more cooking in Congress to "help" us this election season. These guys are going to keep trying to "save" you until you save yourself on Election Day. Stay tuned.
Monday, July 5, 2010
CPSIA - Deaf Congress Makes Up Its Own Justifications for New Law
The recently approved H.R. 4678 Foreign Manufacturers Legal Accountability Act of 2010 is based on testimony given by several of the usual suspects. Consumer groups filed testimony portraying the need for this law as rather "obvious":
Consumers Union (June 16, 2010): "While [the CPSIA] has made great strides in improving product safety, and will continue to do so as its implementation continues, the CPSIA focuses on improving safety by requiring that children’s products subject to mandatory standards be tested to ensure compliance with the standard. The law does not address bringing foreign manufacturers into our civil justice system. However, to fully protect consumers from unsafe products, wherever they are made, American consumers must be able to hold manufacturers accountable when they are harmed – no matter where the products are made."
Consumers Union goes on to assert: "If a foreign manufacturer knows that they cannot be held responsible in U.S. courts for the products they sell, this knowledge has a likely significant impact upon their manufacturing decisions. Do they use the stronger, more expensive component? Do they ensure that the product meets the safety standards? Do they prioritize safety if they know they are not accountable to U.S. consumers in U.S. courts? Holding manufacturing entities accountable in our civil justice system acts as an important deterrent to unethical and potentially harmful business conduct."
The Briefing Memo for the mark-up (prepared by the Dems) takes up the anti-business, leftist consumer group cause, namely that we need to change the rules to allow consumers to sue foreign manufacturers to protect our way of life. The new law is intended to overcome a little legal wrinkle preventing true consumer justice - the U.S. Constitution:
"In addition, even if a victim successfully serves process on a foreign manufacturer, the manufacturer will likely challenge the exercise of personal jurisdiction over it by a U.S. court. Under well-established constitutional due process principles, before a U.S. court can exercise personal jurisdiction over a defendant it must consider: (1) the defendant’s purposeful minimum contacts with the state in which the court sits, and (2) fairness to the defendant of being subjected to jurisdiction in that state’s courts. . . . H.R. 4678 requires foreign manufacturers and producers that import products into the United States to designate a registered agent who is authorized to accept service of process here in the United States. . . . Registering an agent consistent with the Act constitutes acceptance by the manufacturer of personal jurisdiction of the state and federal courts of the state in which the agent is located."
Problem solved! Congress found a way to circumvent the framers' intent. That darned Constitution gets in the way of good government, you know.
Notably, the "urgent" need to go around the Constitution was not echoed in the CPSC's own testimony:
"Additional authority allowing the CPSC to require foreign manufacturers designate a U.S. registered agent for service of process could be helpful in some cases – particularly those involving administrative requests for documents or information.”
“In a few cases, however, the lack of a registered agent for service of process has hindered the Commission's ability to develop information that would help us to provide relief to consumers.”
“The lack of a registered agent for service of process has also been recognized by Chinese industry groups, and some local lawyers in China have provided legal advice seeking to exploit this situation . . . . This type of sentiment appears rare.” [Emphasis added]
Opponents to the bill made arguments similar to those previously highlighted in this space (see above and here): American Association of Importers and Exporters and National Customs Brokers & Forwarders Association of America.
I estimate that our business will lose 25-50% of our foreign suppliers and untold numbers of component factories if they are required to have a registered agent under this new law. Most of these sources are irreplaceable in our business (for a variety of reasons). That means that the products we make at these factories will have to be discontinued. Too bad for us, I guess. This could happen quickly, too.
I wish that were the only problem. The lame-brained notion that foreign countries will allow U.S. citizens to cross borders to take domestic assets to settle foreign disputes will prove to be delustional. U.S. companies will soon be greeted by reciprocal registration requirements or even harsher laws exposing them to onerous trade barriers and significant new legal risks. Again, our business is squarely in the bullseye of this maelstrom. We have worked tirelessly for more than 20 years to build an international network of dealers for our products. That creates JOBS here. Anyhow, it is inevitable that a law like this will spawn a need to register our company in dozens of countries abroad, meaning we would need to hire a law firm for each country, translate all the laws, decide if we want to bear the expense and risk of registration. Our foreign business would evaporate quickly and efficiently.
The basic idea that our country actually needs this law is hard to comprehend. Where are all the hungry plaintiffs' attorneys who can't put food on the table? Which rights aren't being satisfied? For each product imported into this country, there must a U.S. importer. Why isn't that pool of assets enough to satisfy this need, as it has been for years and years? Why doesn't importers' exposure under the U.S. tort system provide enough incentive to address Consumers Union's parade of horribles above? I thought that's why we have our crazy tort system in the first place. No answer has been provided by Congress to these questions. They just gave us a wonderful new law to worry about.
Thanks so much, Democrats in Congress. We love ya! And we can't wait to vote AGAINST you! See you at the polls.
Consumers Union (June 16, 2010): "While [the CPSIA] has made great strides in improving product safety, and will continue to do so as its implementation continues, the CPSIA focuses on improving safety by requiring that children’s products subject to mandatory standards be tested to ensure compliance with the standard. The law does not address bringing foreign manufacturers into our civil justice system. However, to fully protect consumers from unsafe products, wherever they are made, American consumers must be able to hold manufacturers accountable when they are harmed – no matter where the products are made."
Consumers Union goes on to assert: "If a foreign manufacturer knows that they cannot be held responsible in U.S. courts for the products they sell, this knowledge has a likely significant impact upon their manufacturing decisions. Do they use the stronger, more expensive component? Do they ensure that the product meets the safety standards? Do they prioritize safety if they know they are not accountable to U.S. consumers in U.S. courts? Holding manufacturing entities accountable in our civil justice system acts as an important deterrent to unethical and potentially harmful business conduct."
The Briefing Memo for the mark-up (prepared by the Dems) takes up the anti-business, leftist consumer group cause, namely that we need to change the rules to allow consumers to sue foreign manufacturers to protect our way of life. The new law is intended to overcome a little legal wrinkle preventing true consumer justice - the U.S. Constitution:
"In addition, even if a victim successfully serves process on a foreign manufacturer, the manufacturer will likely challenge the exercise of personal jurisdiction over it by a U.S. court. Under well-established constitutional due process principles, before a U.S. court can exercise personal jurisdiction over a defendant it must consider: (1) the defendant’s purposeful minimum contacts with the state in which the court sits, and (2) fairness to the defendant of being subjected to jurisdiction in that state’s courts. . . . H.R. 4678 requires foreign manufacturers and producers that import products into the United States to designate a registered agent who is authorized to accept service of process here in the United States. . . . Registering an agent consistent with the Act constitutes acceptance by the manufacturer of personal jurisdiction of the state and federal courts of the state in which the agent is located."
Problem solved! Congress found a way to circumvent the framers' intent. That darned Constitution gets in the way of good government, you know.
Notably, the "urgent" need to go around the Constitution was not echoed in the CPSC's own testimony:
"Additional authority allowing the CPSC to require foreign manufacturers designate a U.S. registered agent for service of process could be helpful in some cases – particularly those involving administrative requests for documents or information.”
“In a few cases, however, the lack of a registered agent for service of process has hindered the Commission's ability to develop information that would help us to provide relief to consumers.”
“The lack of a registered agent for service of process has also been recognized by Chinese industry groups, and some local lawyers in China have provided legal advice seeking to exploit this situation . . . . This type of sentiment appears rare.” [Emphasis added]
Opponents to the bill made arguments similar to those previously highlighted in this space (see above and here): American Association of Importers and Exporters and National Customs Brokers & Forwarders Association of America.
I estimate that our business will lose 25-50% of our foreign suppliers and untold numbers of component factories if they are required to have a registered agent under this new law. Most of these sources are irreplaceable in our business (for a variety of reasons). That means that the products we make at these factories will have to be discontinued. Too bad for us, I guess. This could happen quickly, too.
I wish that were the only problem. The lame-brained notion that foreign countries will allow U.S. citizens to cross borders to take domestic assets to settle foreign disputes will prove to be delustional. U.S. companies will soon be greeted by reciprocal registration requirements or even harsher laws exposing them to onerous trade barriers and significant new legal risks. Again, our business is squarely in the bullseye of this maelstrom. We have worked tirelessly for more than 20 years to build an international network of dealers for our products. That creates JOBS here. Anyhow, it is inevitable that a law like this will spawn a need to register our company in dozens of countries abroad, meaning we would need to hire a law firm for each country, translate all the laws, decide if we want to bear the expense and risk of registration. Our foreign business would evaporate quickly and efficiently.
The basic idea that our country actually needs this law is hard to comprehend. Where are all the hungry plaintiffs' attorneys who can't put food on the table? Which rights aren't being satisfied? For each product imported into this country, there must a U.S. importer. Why isn't that pool of assets enough to satisfy this need, as it has been for years and years? Why doesn't importers' exposure under the U.S. tort system provide enough incentive to address Consumers Union's parade of horribles above? I thought that's why we have our crazy tort system in the first place. No answer has been provided by Congress to these questions. They just gave us a wonderful new law to worry about.
Thanks so much, Democrats in Congress. We love ya! And we can't wait to vote AGAINST you! See you at the polls.
Wednesday, June 30, 2010
CPSIA - Foreign Mfr Legal Acccountability Act Passes
Congress was listening. Your House Energy and Commerce Committee passed by voice vote today the Foreign Manufacturer Legal Liability Act of 2010 by voice vote. Now it proceeds to full committee or possibly to Ways and Means or possibly to the floor for a vote. I don't have the bill language yet.
Golly, I really appreciate all the hard work to protect me against . . . I'm not sure what. Protecting me against being able to earn a living?
Thanks, House Leaders!
Golly, I really appreciate all the hard work to protect me against . . . I'm not sure what. Protecting me against being able to earn a living?
Thanks, House Leaders!
CPSIA - More Analysis of Damaging Foreign Mfr Accountability Legislation
One additional point about the design of the extremely ill-conceived Foreign Manufacturers Legal Accountability Act of 2010: the "minimum amount" hurdle that triggers the requirement to register for service of process is NOT set by the law. The different agencies have to set it for the products they regulate.
The draft legislation provides the following mechanism for establishing this limit:
"(4) APPLICABILITY — (A) IN GENERAL.—Paragraph (1) applies only with respect to a foreign manufacturer or producer that exceeds minimum requirements established by the head of the applicable agency under this section. (B) FACTORS.—In determining the minimum requirements for application of paragraph (1) to a foreign manufacturer or producer, the head of the applicable agency shall, at a minimum, consider the following: (i) The value of all covered products imported from the manufacturer or producer in a calendar year. (ii) The quantity of all covered products imported from the manufacturer or producer in a calendar year. (iii) The frequency of importation from the manufacturer or producer in a calendar year."
So for those of us suffering under the CPSIA, this legislation tenders some discretion to the CPSC on how penal this provision will be. Interesting, isn't it, that Congress will allow the CPSC to set this threshold without oversight but won't let them assess the risk of pens, rhinestones, science kits or ATVs? Anyhow, given the current practice of the CPSC to apply strict liability standards to so many things, leading to recalls of (for instance) 40 inflatable toy baseball bats for violative phthalate levels (the one-and-only recall for phthalates in U.S. history) and the pending "15 Month Rule" which creates an unbearably expensive and risk-averse scheme of safety compliance, I presume that the CPSC will set these thresholds very low. After all, how else can American consumers sleep well at night???
And consider how this rule might be applied. To determine whether you are above or below the threshold, you must disclose your revenues and volumes to the government for their scrutiny and approval. This is remarkably invasive and is reason enough for many factories to concentrate on sales to South America, Europe, Asia and the Middle East. Who needs this nonsense?
[And if registration is unavoidable, the registration process itself is also tedious and requires the disgorgement of lots of detailed information - which not only will discourage participation but also sets up the foreign manufacturers for liability to the government for "false" statements if they make errors. We have 1500 catalog items, so I can identify with the problems that this kind of requirement might create. It's nothing more than a bureaucratic set-up for regulators to accumulate causes of action to use as they see fit.]
If you think I am delusional or just tend to see the world darkly, please ask yourself - would YOU disclose ANY of this information to the government of Germany? China? Slovakia? Venezuela? Do you trust foreign governments? The confidentiality of their records? The likelihood that this information will not come back to bite you? Do you expect to get a fair shake in a foreign jurisdiction, particularly in a dispute with a local company? Do you think your suppliers will serve you better if you ask them to do this? Are you important enough to influence your suppliers or would they simply throw you overboard? What will this mean to your business - even if foreign governments refrain from retaliation (unlikely)?
This is yet more evidence of the shamefully low quality work of this Congress and its absolute ignorance of the real world. Think of the pending Waxman Amendment which posits that alternative testing methods can be used by small (micro) businesses to avoid certain testing requirements under the CPSIA. Of course, no such testing methods exist but that's just a trivial detail, right? Or the fact that in order to qualify for this "relief" under that legislation, each of these tiny businesses must disclose their financial records to Mother Government to confirm their eligibility for relief. Sounds REALLY workable, right? It does, if you have never worked for a company and have been closeted in the federal government for long enough.
Another sad, sorry low point for the worst Congress in history. Well, it's nice to be distinguished in SOME way, right???
The draft legislation provides the following mechanism for establishing this limit:
"(4) APPLICABILITY — (A) IN GENERAL.—Paragraph (1) applies only with respect to a foreign manufacturer or producer that exceeds minimum requirements established by the head of the applicable agency under this section. (B) FACTORS.—In determining the minimum requirements for application of paragraph (1) to a foreign manufacturer or producer, the head of the applicable agency shall, at a minimum, consider the following: (i) The value of all covered products imported from the manufacturer or producer in a calendar year. (ii) The quantity of all covered products imported from the manufacturer or producer in a calendar year. (iii) The frequency of importation from the manufacturer or producer in a calendar year."
So for those of us suffering under the CPSIA, this legislation tenders some discretion to the CPSC on how penal this provision will be. Interesting, isn't it, that Congress will allow the CPSC to set this threshold without oversight but won't let them assess the risk of pens, rhinestones, science kits or ATVs? Anyhow, given the current practice of the CPSC to apply strict liability standards to so many things, leading to recalls of (for instance) 40 inflatable toy baseball bats for violative phthalate levels (the one-and-only recall for phthalates in U.S. history) and the pending "15 Month Rule" which creates an unbearably expensive and risk-averse scheme of safety compliance, I presume that the CPSC will set these thresholds very low. After all, how else can American consumers sleep well at night???
And consider how this rule might be applied. To determine whether you are above or below the threshold, you must disclose your revenues and volumes to the government for their scrutiny and approval. This is remarkably invasive and is reason enough for many factories to concentrate on sales to South America, Europe, Asia and the Middle East. Who needs this nonsense?
[And if registration is unavoidable, the registration process itself is also tedious and requires the disgorgement of lots of detailed information - which not only will discourage participation but also sets up the foreign manufacturers for liability to the government for "false" statements if they make errors. We have 1500 catalog items, so I can identify with the problems that this kind of requirement might create. It's nothing more than a bureaucratic set-up for regulators to accumulate causes of action to use as they see fit.]
If you think I am delusional or just tend to see the world darkly, please ask yourself - would YOU disclose ANY of this information to the government of Germany? China? Slovakia? Venezuela? Do you trust foreign governments? The confidentiality of their records? The likelihood that this information will not come back to bite you? Do you expect to get a fair shake in a foreign jurisdiction, particularly in a dispute with a local company? Do you think your suppliers will serve you better if you ask them to do this? Are you important enough to influence your suppliers or would they simply throw you overboard? What will this mean to your business - even if foreign governments refrain from retaliation (unlikely)?
This is yet more evidence of the shamefully low quality work of this Congress and its absolute ignorance of the real world. Think of the pending Waxman Amendment which posits that alternative testing methods can be used by small (micro) businesses to avoid certain testing requirements under the CPSIA. Of course, no such testing methods exist but that's just a trivial detail, right? Or the fact that in order to qualify for this "relief" under that legislation, each of these tiny businesses must disclose their financial records to Mother Government to confirm their eligibility for relief. Sounds REALLY workable, right? It does, if you have never worked for a company and have been closeted in the federal government for long enough.
Another sad, sorry low point for the worst Congress in history. Well, it's nice to be distinguished in SOME way, right???
Tuesday, June 29, 2010
CPSIA - Your Partner in Mischief, Congress
Never content to leave an economy merely in tatters, Henry Waxman and Bobby Rush jumped into action this week to create an international trade war, all in the name of "protecting" you. In fact, their troubling new legislation includes a sneak amendment of the CPSIA. It also takes an idea dropped from the CPSIA (submission to U.S. jurisdiction) and applies it across several new industries. Sounds promising, right?
Nominally introduced by Rep. Betty Sutton (D-OH), a wobbly Democrat said to need propping up in her faltering reelection campaign, the new bill (called "H.R.4678 -- Foreign Manufacturers Legal Accountability Act of 2010") is scheduled for mark-up tomorrow (in Rush's subcommittee. This innocuous and technical sounding bill is packed with trouble for you and for our country. In Sutton's blue collar industrial district, that kind of work is prized. Or so the Dems must think.
Here is the GovTrack version of the bill. In fact, I have obtained a more recent version of the bill, a "manager's mark-up" , which includes many new provisions. The revised version of the bill packs quite a punch, right to the gut. I discuss the newer version of the bill below.
The purpose of this bill is to make foreign manufacturers of finished goods and parts intended to be used as components in those finished goods register for service of process in this country. In other words, foreign manufacturers must register here so our plaintiff's bar and the government can sue them with ease. The new law prohibits trade with foreign manufacturers unless they are registered, and enlists the aid of the federal government's snarling dog, the U.S. Customs and Border Patrol, to enforce this law.
This means that every factory we use outside the U.S. will have to register for service of process in the U.S. if we want to continue to import our products from them. The law goes even FURTHER, asking that each agency involved to study ways to force manufacturers of components to register here, too. So, for example, if you make a toy in China and your factory buys boxes from a local printer who has NO contractual relationship with you, this law asks the agencies to study the feasibility of getting such box printers to register for service of process in this country. To accomplish that lofty goal, of course, you have to know their identity. Our customers do not know our vendors' names and we aren't telling. It's none of their business. Do you think it's any different for our factories relative to us? Will they ever disclose that information to our Mother Government (to them, a foreign government)? Please - would you disclose your sources to the Chinese government? And who pays the administrative and out-of-pocket costs of this exercise? And what about the consequences of the fear factor and the costs of new litigation on markets?
What-a-stimulus program! Naturally, those groups most linked to your future business health and ability to create jobs, the plaintiff's bar and consumer groups, think this legislation is long overdue!
The scope of this law covers the EPA, the CPSC, the FDA and NHTSA, and applies to drugs, cosmetics, medical devices, "biological products", consumer products, chemicals and chemical mixtures under TSCA (the coming storm), pesticides, motor vehicles or "motor vehicle equipment", plus components for the foregoing. That's pretty much everything and everyone.
Oh, by the way, the manager's mark-up adds a little provision that gives you five working days to inform the CPSC if you have "a safety recall or other safety campaign" in any country, whether initiated by the company or by the foreign government. Just thought they'd slip that one in, just in case you weren't watching!
So, who cares? Doesn't this "solve" the Chinese drywall problem? In fact, it's going to make things a lot worse. This is Major League trade war material. It is not entirely unlike Smoot-Hawley, the bill that precipitated the Depression. None of our factories will be willing to accept exposure to our ravenous tort system and out-of-control invasive government regulators as a condition of doing business with us. To most of them, this will be too risky and too hard to understand. Our suppliers are small businesses like us - they will NEVER have the resources or skills to master the minute details of our legal system and myriad risks and rules. It will also be breathtakingly expensive for them, and they run very low margin businesses with no ability to absorb those costs.
Even if some of our factories will take this risk, many will not. As with Smoot-Hawley's tariffs, this kind of rule will spur quick responses by foreign governments. If the U.S. wants the right to reach across borders and take the assets of foreign companies without a legal presence in this country, then foreign governments will extend the same "privilege" to U.S. companies selling products inside their borders. Won't that be nice?! Learning Resources sells its products in dozens of countries. Will we have to register in each country to continue to do so? Will we be exposed to lawsuits all over the world as a result? Will we have to pay to settle "strike suits" in dozens of new jurisdictions? If the answer is yes, I cannot imagine staying in business across borders.
The provision about foreign "safety campaigns" is intended to make sure that we don't miss a trick here. The Waxmanis want a worldwide recall system. Does ANYONE IN CONGRESS know what this will cost? Congress must want to terminate small businesses in our economy.
Rumor has it that Ways and Means wants to take this bill out of the hands of the Energy and Commerce Committee. Of course. Speaker Pelosi can skip that step if she wants. Ways and Means purportedly knows there are BIG problems here and I am assured the Republicans on that committee will fight to restrain this bill. Still, it is in keeping with recent House practice to pass something irresponsible and dangerous like this bill, relying on the Senate to stop it. It's a "message" bill, unless it somehow gets passed into law . . . . Then there's the rumor that the Dems intend to stick it into a moving bill, like a jobs bill, to make it impossible to stop. You know, because it's for our own good.
This is an example of how I learned to HATE Congress and Democrats. These rules descend on our business in suffocating waves, adding no value but creating major distractions and feeding fear. On the other hand, perhaps I will be eating crow when Obama's recently announced master plan to reduce the deficit by two-thirds in three years through increased spending, increased entitlements, increased taxes and increased regulation works like a charm. Maybe this law is part of the implementation of that great plan.
It must be me.
It must be me. . . right?
Nominally introduced by Rep. Betty Sutton (D-OH), a wobbly Democrat said to need propping up in her faltering reelection campaign, the new bill (called "H.R.4678 -- Foreign Manufacturers Legal Accountability Act of 2010") is scheduled for mark-up tomorrow (in Rush's subcommittee. This innocuous and technical sounding bill is packed with trouble for you and for our country. In Sutton's blue collar industrial district, that kind of work is prized. Or so the Dems must think.
Here is the GovTrack version of the bill. In fact, I have obtained a more recent version of the bill, a "manager's mark-up" , which includes many new provisions. The revised version of the bill packs quite a punch, right to the gut. I discuss the newer version of the bill below.
The purpose of this bill is to make foreign manufacturers of finished goods and parts intended to be used as components in those finished goods register for service of process in this country. In other words, foreign manufacturers must register here so our plaintiff's bar and the government can sue them with ease. The new law prohibits trade with foreign manufacturers unless they are registered, and enlists the aid of the federal government's snarling dog, the U.S. Customs and Border Patrol, to enforce this law.
This means that every factory we use outside the U.S. will have to register for service of process in the U.S. if we want to continue to import our products from them. The law goes even FURTHER, asking that each agency involved to study ways to force manufacturers of components to register here, too. So, for example, if you make a toy in China and your factory buys boxes from a local printer who has NO contractual relationship with you, this law asks the agencies to study the feasibility of getting such box printers to register for service of process in this country. To accomplish that lofty goal, of course, you have to know their identity. Our customers do not know our vendors' names and we aren't telling. It's none of their business. Do you think it's any different for our factories relative to us? Will they ever disclose that information to our Mother Government (to them, a foreign government)? Please - would you disclose your sources to the Chinese government? And who pays the administrative and out-of-pocket costs of this exercise? And what about the consequences of the fear factor and the costs of new litigation on markets?
What-a-stimulus program! Naturally, those groups most linked to your future business health and ability to create jobs, the plaintiff's bar and consumer groups, think this legislation is long overdue!
The scope of this law covers the EPA, the CPSC, the FDA and NHTSA, and applies to drugs, cosmetics, medical devices, "biological products", consumer products, chemicals and chemical mixtures under TSCA (the coming storm), pesticides, motor vehicles or "motor vehicle equipment", plus components for the foregoing. That's pretty much everything and everyone.
Oh, by the way, the manager's mark-up adds a little provision that gives you five working days to inform the CPSC if you have "a safety recall or other safety campaign" in any country, whether initiated by the company or by the foreign government. Just thought they'd slip that one in, just in case you weren't watching!
So, who cares? Doesn't this "solve" the Chinese drywall problem? In fact, it's going to make things a lot worse. This is Major League trade war material. It is not entirely unlike Smoot-Hawley, the bill that precipitated the Depression. None of our factories will be willing to accept exposure to our ravenous tort system and out-of-control invasive government regulators as a condition of doing business with us. To most of them, this will be too risky and too hard to understand. Our suppliers are small businesses like us - they will NEVER have the resources or skills to master the minute details of our legal system and myriad risks and rules. It will also be breathtakingly expensive for them, and they run very low margin businesses with no ability to absorb those costs.
Even if some of our factories will take this risk, many will not. As with Smoot-Hawley's tariffs, this kind of rule will spur quick responses by foreign governments. If the U.S. wants the right to reach across borders and take the assets of foreign companies without a legal presence in this country, then foreign governments will extend the same "privilege" to U.S. companies selling products inside their borders. Won't that be nice?! Learning Resources sells its products in dozens of countries. Will we have to register in each country to continue to do so? Will we be exposed to lawsuits all over the world as a result? Will we have to pay to settle "strike suits" in dozens of new jurisdictions? If the answer is yes, I cannot imagine staying in business across borders.
The provision about foreign "safety campaigns" is intended to make sure that we don't miss a trick here. The Waxmanis want a worldwide recall system. Does ANYONE IN CONGRESS know what this will cost? Congress must want to terminate small businesses in our economy.
Rumor has it that Ways and Means wants to take this bill out of the hands of the Energy and Commerce Committee. Of course. Speaker Pelosi can skip that step if she wants. Ways and Means purportedly knows there are BIG problems here and I am assured the Republicans on that committee will fight to restrain this bill. Still, it is in keeping with recent House practice to pass something irresponsible and dangerous like this bill, relying on the Senate to stop it. It's a "message" bill, unless it somehow gets passed into law . . . . Then there's the rumor that the Dems intend to stick it into a moving bill, like a jobs bill, to make it impossible to stop. You know, because it's for our own good.
This is an example of how I learned to HATE Congress and Democrats. These rules descend on our business in suffocating waves, adding no value but creating major distractions and feeding fear. On the other hand, perhaps I will be eating crow when Obama's recently announced master plan to reduce the deficit by two-thirds in three years through increased spending, increased entitlements, increased taxes and increased regulation works like a charm. Maybe this law is part of the implementation of that great plan.
It must be me.
It must be me. . . right?
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