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Tuesday, September 23, 2008

No Tainted Chinese Milk Products On U.S. Store Shelves - So Far

The latest crisis of tainted food products from China is perhaps the most serious. Some 13,000 children hospitalized, 4 known dead, all in China. The number of countries in Asia and Africa which has banned the import of Chinese milk products grows by the hour.

Chinese baby formula is already illegal in the U.S. That doesn't prevent people from trying to order it over the Internet. And milk derivatives of all kinds are found in thousands of products.

A Reuters article noted that:

The FDA says it has contacted the companies that make infant formula for distribution in the United States and been assured that none import formula or source materials from China. Inspectors have also visited Chinese markets and stores to look for imported Chinese infant formula.

"Additionally, the FDA is sampling and testing milk and milk-derived ingredients and finished food products that could contain these ingredients from Chinese sources. Milk-derived ingredients include whole milk powder, nonfat milk powder, whey powder, lactose powder and casein," the agency said in a statement last week.

The agency as well as local and state officials are also conducting sweeps of stores that import Chinese products. The CBS5 website in San Francisco reported that after a popular Chinese milk candy called "White Rabbit" was found to have the tainted milk in Asia, inspectors found boxes of it in a Bay area store, but that the store had already heeded the recall warning and removed them from shelves.

The chances of any of the melamine-laced milk or milk derivatives being sold in the U.S. at the current point seem small, possibly infinitesimal.

While that's a relief, many commentators are pointing out that the safety of any particular product is a shadow of the much larger issue. China is simply incapable of properly regulating, policing, or managing the unimaginably huge number of companies that are part of China's worldwide export boom. The world has turned to China to provide it with inexpensive goods. The opportunities are gigantic and that means the temptations are equally huge. Only a tiny percentage of the manufacturers have to fall to temptation for the impact to reverberate globally. That's what we're seeing now, and what we will continue to see for years to come.

Nobody reasonably expects trade with China to cease. And China has every incentive to try to improve its safety and regulatory functions. It can never completely succeed. We just need to look at U.S. history and the thousands of cases of tainted food products from greedy manufacturers in our own past, especially before a series of federal laws and crackdowns made inspections more frequent and penalties harsher.

China has not reached that point. What's worse is that we - the United States - appears to be complicit.

The Washington Post columnist John Pomfret reported this piece of bad news in his blog:
The Bush administration made the obligatory noise about cracking down on Chinese goods. But the reality was that, according to a series of agreements signed between the Bush administration and the Chinese government in Beijing in December of last year, no significant new American resources are going to be devoted to dealing with the problem. The onus is on the Chinese to clean up their act.

Today, I heard Nicholas Lardy, one of the premier economists on China, say his big takeaway from the milk scandal was simple. It was "ludicrous," he said, to expect that a country such as China (still quite poor) could police itself when it comes to product safety. The Bush administration, Lardy said, was naive to sign agreements with China that didn't commit the United States to bolstering its own systems to protect Americans from tainted products.

With only four months to go, the next Administration will be the recipients of this problem. Yet another crisis that will be dumped on its shoulders. And yet another crisis made worse by greed, shortsightedness, and incompetence at the highest levels.

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