Made in China

China has provided an interesting distraction from the war and political bickering which I have gotten tired of writing about. I find China so interesting because it adds to my cadre of data showing that it is better to trade with partners on the same regulatory footing as you, than with one that is not.

The FAA won’t allow aircraft into U.S. airspace unless the aircraft has received an FAA airworthiness certificate or one from an equivalent entity like EASA. This normally means that the aircraft design, construction and maintenance all have to occur under the strict regulatory guidelines of these agencies. Since many of the non-U.S. agencies have harmonized their regulations with ours, it is easy to know which aircraft to trust. If the aircraft has been off of the radar of such an agency for some time, maintained in a questionable manner, its airworthiness is questioned and can be revoked. The reason for this is simple: we need to know our airspace is predictably safe.

The United States requires we know everything about the aircraft within our system, from the mines where the aluminum emerged to the last person who performed maintenance on it. When an incident occurs, every element of that aircraft can be reviewed to identify how and why it may have happened, and that review must occur in a timely manner. The incident can be reviewed to see if it is a design, construction or maintenance issue: if it is a design issues, all aircraft of that type can be kept from flying; if it is a construction, certain serial numbers of a particular model can be grounded for review; and if it is a maintenance issue, the models that passed through that maintenance facility can be reviewed. All of this is made possible by the common regulatory foundation to prevent the reoccurrence of the incident and save lives.

While the U.S. also has steep regulatory compliance guidelines by the EPA for domestic companies, it does not impose the same requirements on goods entering the country even if they are comparable to a U.S. product. Unlike the FAA, the EPA apparently does not require those shipping goods into the U.S. to have a similar mechanism to the EPA to regulate or identify potentially hazardous materials used in the manufacturing of products for the home. It should be recognized that this is in fact part of the reason U.S. based companies seek to manufacture things in China; the high cost of regulatory compliance at home. The more frightening fact of our global economy is that we also need to realize this applies to the FDA as well.

The recent Chinese incidents should be a warning to us, that everything we import is suspect unless they can certify that it is not, as the FAA requires. If the country we are importing from does not act to put in place the regulatory framework to make this happen, our own regulatory agencies should have the teeth to force that the goods demonstrate they comply by stateside batch testing or other means. To not loose site of the true cost of dealing with these unregulated markets, those tests should be paid for by directly taxing the goods in question, to do otherwise is to wrongly represent imports as costing less than domestic alternatives.