Press conference speaking points
Brussels, November 22nd 2007
Since September, I have been involved in a wide ranging stocktaking review on product safety.
Today, I will present to you the conclusions of the exercise: the lessons we learnt, the areas for improvement we have identified, and the action we intend to take.
I started this review with one very clear objective in mind – to answer the tough questions people were asking about product safety, about consumer goods from China.
Following a “summer of recalls,” we needed to face up to those questions. People needed answers.
The stocktaking set out to examine every link in the supply chain. To double check if they were functioning at an optimal level. To identify strengths, weaknesses and any room for improvement.
Before I go through in details of the stocktaking process and main results, I would like to take a moment to look at the context we are working in.
THIS DEBATE IS ABOUT PRODUCT SAFETY – BUT IT IS ALSO EMBODIES PROFOUND ISSUES RELATING TO OUR ABILITY TO MANAGE OPEN MARKETS AND RESPOND TO GLOBALISATION
Europe has made the choice for an open society and an open economy. This has brought and continues to bring tremendous benefits to European consumers, taxpayers, workers and enterprises.
Today our citizens enjoy choices that were unaffordable and unimaginable a generation ago.
Consumers expect choice, quality and value for money. You need very strong reasons to take away peoples’ choices. Choice merits protection too!
And in the real world, it would be naïve to believe that the world can be confined to the local village. We cannot close our borders.
In a global economy, Europe is open for business or it is out of business.
But in this new economy, the journey from factory floor to supermarket shelf often spans the globe. This is why effective governance on consumer safety is such a critical issue today.
Trust is the new currency of the global economy.
And there is a very thin line between protection and protectionism. There are some old-world protectionists, who would like to “hide behind the skirts” of consumer safety. I think that they believe that risk is defined more by its passport than the hazards involved!
Open markets are built on consumer confidence.
So, the present debate is not just about toys and China. It embodies profound issues related to our ability to build consumer confidence in an open trading model, to better regulation and proportionality and about basic confidence in governance.
There are three basic messages which I have repeated since I launched this review:
1. THERE CAN BE NO COMPROMISE ON CONSUMER SAFETY
This is about European values, this is about high standards, this is about what people expect from the European Union.
2. WE BELIEVE IN OPEN MARKETS AND FAIR COMPETITION
Open markets are built on consumer confidence. Trust in the market is essential. And there will be no double standards – all goods coming on to the European market will treated the same.
3. WE WANT TO WORK IN PARTNERSHIP WITH THE CHINESE
We want to solve problems together. Europe is China’s No. 1 export market and China’s No.1 trade partner. It is in China and the European Union’s mutual interest to boost consumer confidence in the market.
Now let me say something more specific about the stocktaking process itself, and the outcomes
THIS HAS BEEN A VERY A THOROUGH SCREENING EXERCISE
Within the Commission, with Vice-President Verheugen, I have worked with the services of Commissioners Mandelson, Kovács, Kyprianou and Ferrero Waldner to carry out an internal screening of current European and international legislative framework governing product safety.
During the same period, my services and I have met with all the major external actors involved in managing the supply chain the toy industry. In the past two months, I have spoken with Ministers in the Competitiveness Council, with Members of the European Parliament, with leading CEOs and retailers, with consumer representatives as well as with my counterparts in the US Administration responsible for carrying out a parallel stocktaking review. I met with Chinese Ministers in July and have been in contact throughout the process.
There have been numerous meetings with all these actors at official level as well.
THERE ARE TWO MAIN CONCLUSIONS COMING FROM THE REVIEW
1. THE BASIC REGULATORY FRAMEWORK FOR CONSUMER PRODUCT SAFETY IS UP TO THE JOB – WHEN PROPERLY APPLIED
The current EU legislative framework is basically capable of ensuring a high level of consumer protection and facilitating intra-community trade at the same time.
When properly applied, it is fit for purpose.
The existing legislation, combined with legislation in the pipeline gives us the tools for the job.
Of course, laws regulating products are not eternal. Products, market structures, trade flows change at an increasing rapid pace. And so do the expectations of our citizens as regards the safety of the products they use. Rules should aim to anticipate or at least rapidly adapt to these changes. In particular, important regulatory issues will be addressed by the Commission proposal for a revised Toy Directive which is due in the first quarter of 2008. Revised rules for cosmetics are also in the pipeline. And the Internal market for goods Package, which will tackle particularly specific issues on accreditation, market surveillance and import controls.
2. THE MAIN ISSUE IS ENFORCEMENT
All the actors involved must raise their game.
INDUSTRY MUST TAKE ITS FULL RESPONSIBILITIES
The first responsibility for putting safe products on the markets lies with industry. And no one is going to take that responsibility from their shoulders.
The general impression from the stocktaking is that reputable businesses make significant efforts to ensure the safety of their products and improvements in this area is a day-to-day task.
Nevertheless, the constant stream of RAPEX notifications regarding unsafe toys shows that there are still significant problems in making sure all toys, especially at the lower end of the market, are safe and further efforts are necessary:
Industry has agreed to work with us over the coming months on a range of measures to build confidence in the sector, the full list is included in the review.
And I have decided to carry out a fast but comprehensive audit of business safety measures in place in the toy supply chain. The project will also look at the less ‘visible’ part of the toy sector, and deliver results first quarter of 2008. Industry, together with consumer representatives and national authorities, has agreed to provide expertise and support. The recommended actions coming from this study will be implemented with industry in 2008.
NATIONAL AUTHORITIES ARE DOING MORE
The evidence from the stocktaking is that Member States have generally been vigilant and accompanied positively and effectively the ‘voluntary’ recalls.
Enforcement remains a significant challenge for everyone involved in this process.
In October, representatives of all Member States gave detailed presentations about their activities regarding the recalls and any additional actions focused on toys.
This showed that the recent toy recalls have been adequately followed and accompanied by the responsible authorities, also through reinforced surveillance.
Member States surveillance authorities have “dug deep” over this period and the effects of this increased effort by the Member States are already visible in the RAPEX System (Rapid Alert System for Dangerous Goods):
In the first 10 months of 2007, the number of RAPEX alerts has grown by 56% compared with the same period of 2006;
October 2007 saw an all-time high of 179 RAPEX notifications;
69% of all notifications during the same month concern Chinese products against an average of 48%; and
Toys were the subject of 39% of all October notifications against an average of around 25%. (power point slide)
The evidence from the screening is that, toy safety appears to be a major priority for market surveillance authorities in the Member States. In some of them, almost 50% of the resources allocated to consumer product safety enforcement are devoted to this area. Many Member States indicated that they run regular campaigns on toy safety, in particular in the run-up to the Christmas period.
Despite this positive response, it is the duty of the Commission to make it clear that enforcement of product safety rules needs to receive constant attention and sufficient resources throughout the internal market.
Our partnership with Member States is working well, a lot has been done and there is more to do.
I intend to work with the Member States to drive forwards necessary improvements to the enforcement practice. The current, positive efforts have to be sustained and supported, where necessary, by proportionate, targeted and risk-based measures.
In the absence of specific safety requirements for magnets in toys and awaiting the revision of the relevant standard, the provisions of Article 13 of the General Product Safety Directive should be used to draft a targeted measure, requiring appropriate warnings about the dangers of magnets in toys. Some Member States have already taken a similar initiative.
With regard to effective enforcement, traceability has emerged as a key issue from this review.
Under current rules, traceability requirements are limited to the EU: an economic operator placing a product on the European market is responsible for its safety, and he or she must be identified.
I want to work with Member States, industry and exporting countries to address the issue of better traceability, including the possibility of clearer requirements for traceability in the consumer goods sector, going all the way to the source of a product. This issue, by the way, is also under discussion with the European Parliament and Council in the framework of the Internal Market for goods Package.
In the medium and long term, we must work towards constant improvement of the co-operation, in particular the interoperability of systems, between market surveillance and customs authorities.
WE NEED TO GO FUTHER IN OUR CO-OPERATION WITH THE US ADMINISTRATION
The US and European Union have an obvious shared interest in co-operating, to face common challenges on product safety and import controls.
I have met twice in the last two months in Washington my US counterpart, Health and Human Services Secretary Michael Leavitt, and Deputy Secretary HHS Dr Tevi D Troy to discuss of the stocktaking processes that have been ongoing on both sides of the Atlantic.
The increased co-operation of recent months will continue at a technical and political level.
In particular, the Transatlantic Economic Council’s first meeting saw an extensive discussion on product safety, covering issues related to information sharing, mutual recognition and the decision to establish a specific working group on product/ import safety.
At the same time, Congress is discussing a bill aimed at strengthening the Consumer Product Safety Commission (CPSC). A key element of this draft bill is the proposal to allow the CPSC to exchange information with third country authorities, which would allow us to put our cooperation on a more effective footing.
THERE HAS BEEN CONSIDERABLE PROGRESS IN OUR CO-OPERATION WITH CHINA
Since my visit to China in July this year, my message has been very clear, The figures we have from our EU-wide Rapid Alert System (RAPEX) give cause for concern. We take them very seriously
The RAPEX annual report in 2006 shows that out of all the alerts from Member States for dangerous consumer goods on the European market – 50 % of alerts are for goods of Chinese origin.
We must keep a sense of perspective. Over the past decade, China has developed into the biggest trading partner for the EU. As the ‘world’s workshop’, China produces many of the day-to-day products used by European consumers. And often, also in the case of products later withdrawn from the market, Chinese manufacturers produce to the exact specifications of Western importers
The large number of alerts is also a function of the massive export flows in traded goods from China to the EU. These amounted to 192 billion euro in 2006, and are growing at over 20% a year. Despite this, and despite the steeply increased activity recorded by the RAPEX system, the percentage of products of Chinese origin notified is largely stable.
THE RECALLS THIS SUMMER WERE NOT A WAKE UP CALL – WE WERE ALREADY AWAKE
Since 2006 we had a cooperation framework (MoU) in place to work with the Chinese on consumer product safety. In particular we had put in place since 2006 a new EU-CHINA RAPEX system which gives the Chinese authorities privileged access to our system.
The main aim of my visit to China in July this year was to bring that agreement to life.
During my visit, I said that we needed to move towards a trend of 100% follow up of RAPEX notifications. I agreed with the Chinese Minister that a detailed report on prevention and follow up actions on European alerts would be submitted to the European Commission in October.
I made it clear that the two previous RAPEX reports we had received were far below the necessary standard.
I said that I would read the quality and quantity of the October report as clear political signal as to how serious the Chinese authorities were about dealing with Europe’s consumer safety concerns.
I WANT TO TELL YOU THAT THE RESULTS OF THE THIRD EU-CHINA REPORT ARE ENCOURAGING
The analysis of the October RAPEX China report showed that AQSIQ, which is the responsible Chinese administration, has made a significant effort with respect to the enforcement actions it took as a follow-up to the RAPEX notifications of dangerous consumer goods.
Since January 2006, they have now investigated a total of 268 notifications. That means 184 “new” cases investigated since July, compared to 84 in the two previous reports together. (See table below) investigations.
In 116 cases – specific measures were adopted (43% of cases)
93 Export bans were put in place (35% of cases)
In 14 cases, supervision was strengthened over the Chinese manufacture/
In 9 cases corrective action were taken by Chinese manufacturer (3%); exporter (5%)
Another positive signal is that the Chinese authorities have indicated that by December 2007 they will have in place a domestic alert system modelled on the RAPEX system to co-ordinate work with the regions and increase effective cooperation.
Let me be clear, there is still much work to be done to step up the quality and quantity of enforcement actions over the long term.
But our Chinese counterparts are starting to deliver seriously on their commitments, after a patient and long-term work, both at technical and political level.
I believe that these kinds of outcomes show that our co-operative approach with the Chinese is one that we can build on.
Given the importance of the issue it will be addressed at the highest political level in the EU China summit next week.
We will build further on this in 2008 when we will renegotiate our Memorandum of Understanding with the Chinese authorities, which expires in January 2009. I strongly believed that we should, and will, reinforce this framework.
Too many and too frequent high-profile consumer products recalls have given us a clear signal that we should not and cannot ignore. Our safety net needs to be tightened continuously and in a sustained way to meet the challenges of a global economy.
We need to collectively raise our game. We need to work in partnership with Member States, industry and our international partners to rebuild confidence.
There are two different types of issues which we need to move forwards in the coming months.
First a number of very specific issues which I intend to take forwards quickly.
an audit of the business safety measures in the toy supply chain to report back in first quarter of 2008
an EU-wide measure on warnings on magnetic toys
work on traceability with Member States, industry and the Chinese Authorities
work with Member States on monitoring the capacity of national surveillance in proposals for a the new Consumer Scoreboard in spring, 2008, as well as on developing best practice guidelines with Member States
Second, a series of more systematic issues which will need to be taken forwards in a very structured way both within the Commission, with Member States and with international partners.
technical co-operation with the Chinese Authorities
import safety controls with the US Administration
the revision of key regulatory measures – Toy Directive and New Approach package
I want to stress at this stage, that this is not the beginning of a process. The summer of recalls was not a wake up call. We were already awake.
And it is certainly not the end.
There is no room for complacency. What is crucial, I believe, is to keep the sense of momentum that we have had in recent months – that sense of urgency that is necessary to deliver results.
For that reason, I intend to report back to you again in Spring 2008, to outline the progress made. I intend to keep this issue firmly in the public eye.
LET ME FINISH ON THE ISSUE OF CHRISTMAS
I began by saying that this stocktaking review had one very clear objective in mind – to answer the tough questions people were asking about safety.
But the toughest question still needs to be answered. The question I am asked most often, by concerned parents and constituents in the run up to Christmas – can we be sure toys are safe?
In this world, you cannot give 100% guarantees. There is no such thing as zero risk. You can make sure the system is fit for purpose. You can ensure that all the links in the chain raise their game. You can ensure that producers, importers, retailers and governments and EU are ready to rapidly identify and tackle any new problems as they emerge.
And I can assure you 100% of my commitment to keep the pressure on to ensure the highest possible level of safety for our citizens.
Thank you very much for your interest
Now I will be very happy to take any questions.