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DE RUEHHK #1452/01 2180710
ZNR UUUUU ZZH (CCY AD997104 MSI2778-695)
R 060710Z AUG 09
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 8256
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS HONG KONG 001452 
 
SENSITIVE 
SIPDIS 
 
C O R R E C T E D COPY CAPTION 
STATE FOR EAP/CM, STATE PASS CPSC RICHARD O'BRIEN 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD HK CH
SUBJECT: CPSC CHAIRMAN TENENBAUM INITIATES MOU DIALOGUE 
WITH HONG KONG CUSTOMS 
 
REF: HONG KONG 91 
 
¶1. (SBU) Summary: On her first official foreign trip, newly 
appointed U.S. Consumer Products Safety Commission (CPSC) 
Chairman Inez Moore Tenenbaum described her vision for CPSC's 
relations with global manufacturers to Hong Kong industry and 
government representatives.  She proposed establishing a 
nonbinding MOU between the CPSC and Hong Kong's Customs and 
Excise Department (CED) to boost information sharing, 
intensify CPSC training efforts for CED officers, facilitate 
personnel exchanges and establish a framework for other 
collaborative efforts.  CED Commissioner Richard Yuen 
expressed support for an MOU but said "greater operating 
cooperation" should come first.  Tenenbaum answered questions 
from industry and the media and described CPSC initiatives to 
enhance communications with the private sector, including 
efforts to establish CPSC's first foreign office in Beijing. 
End summary. 
 
¶2. (SBU) Comment: Chairman Tenenbaum's July 29-31 visit to 
Hong Kong was eagerly anticipated by government officials and 
leading manufacturers and exporters.  Her breakfast with the 
Hong Kong American Chamber of Commerce (AmCham) received 
greater attendance than any such AmCham event during the past 
two years.  Our industry interlocutors privately expressed 
their appreciation for Tenenbaum's visit and the opportunity 
to hold frank face-to-face discussions with her.  Tenenbaum's 
frequent engagement with the media while in Hong Kong -- and 
her willingness to address specific concerns and questions 
from firms impacted by the U.S. Consumer Products Safety 
Improvement Act (CPSIA) of 2008 -- reinforced one of her core 
messages: the CPSC seeks an open and constructive dialogue 
with industry.  End comment. 
 
MOU Discussion With Hong Kong Customs 
------------------------------------- 
 
¶3. (SBU) While discussing the MOU concept during her July 30 
meeting with CED Commissioner Richard Yuen, Tenenbaum noted 
that the CPSC signed an MOU in April 2004 with the PRC's 
General Administration of Quality Supervision, Inspection and 
Quarantine (AQSIQ).  Yuen expressed CED's willingness to sign 
an MOU with the CPSC, but said, "Rather than work quickly 
toward a written agreement, we'd like to have greater 
operating cooperation first.  We can then examine areas that 
can be addressed by the text of an MOU."  Tenenbaum offered 
to work to find the best way forward. 
 
CEDB Hears Complaints from Hong Kong Industry 
--------------------------------------------- 
 
¶4. (SBU) Secretary for the Commerce and Economic Development 
Bureau (CEDB) Rita Lau told Tenenbaum that Hong Kong-based 
manufacturers have complained to the CEDB's Trade and 
Industry Department (TID) about costs related to compliance 
with the CPSIA.  She asked the CPSC to "grant sufficient 
consideration to the trade" as it seeks to comply with all 
elements of the CPSIA.  She suggested this "could include 
grace periods or a gradual phase-in" of regulations.  Lau was 
encouraged by the CPSC's "emphasis on cooperation with 
industry, and the CPSC's pragmatic, common-sense approach to 
consumer product safety regulation."  She also praised the 
CPSC's website for including translations into Chinese of key 
CPSC rulings.  Tenenbaum cited the CPSC's desire to avoid 
hindering trade between the United States and China, while 
ensuring that all provisions of the CPSIA are met and 
enforced.  As an example of the CPSC's flexibility in 
addressing the concerns of industry, she described the CPSC's 
recent decision to stay the enforcement until February 2010 
of third party testing certification of certain children's 
products. 
 
Meetings With 150 Industry Representatives 
------------------------------------------ 
 
¶5. (U) Chairman Tenenbaum met separately with members of Hong 
Kong's AmCham, the Hong Kong General Chamber of Commerce and 
the Federation of Hong Kong Industries to explain her vision 
for the CPSC's relations with global manufacturers.  She 
pledged that the CPSC will operate under her leadership in an 
"open, transparent and collaborative" manner, and stressed 
the importance of maintaining an "open dialogue" with global 
manufacturers, importers and retailers.  Tenenbaum praised 
the efforts of Hong Kong-based toy manufacturers to comply 
with the CPSIA, stating that only 20 toys made in China were 
recalled by the CPSC thus far in 2009, a trend comparing 
favorably with a total of 65 during all of 2008. 
WITH HONG KONG CUSTOMS 
 
¶6. (U) Participants described difficulties faced by 
manufacturers in complying with disparate product safety 
regulations from the United States, the European Union, other 
international jurisdictions and even various U.S. states. 
Tenenbaum promised to work with other product safety 
regulatory bodies outside the United States to establish a 
global standard for consumer product tracking labels.  She 
said cooperation on this area could establish the basis for 
further international coordination and standardization of 
product safety regulations, but industry must play a leading 
role in establishing global consumer product safety 
standards.  She welcomed efforts by the International Council 
of Toy Industries to establish global toy manufacturing 
norms. 
 
Product Testing Companies Seek Guidance 
--------------------------------------- 
 
¶7. (SBU) Eight senior managers from four international 
consumer product testing companies (Intertek, SGS, Bureau 
Veritas, and Modern Testing Services) updated Tenenbaum about 
CPSIA-related product testing trends.  They said 
manufacturers increasingly require raw materials testing and 
compliance certification from component suppliers, as a means 
to ensure the components comply with CPSIA standards on lead 
and phthalate content.  Manufacturers in China are 
streamlining their component suppliers and sub-contractors as 
a means to better control product content; this has forced 
many smaller manufacturers out of business.  Testing company 
representatives requested "reasonable testing program" 
guidelines from the CPSC as soon as possible to facilitate 
standardized product testing programs and reduce room for 
interpretation about a given program's "reasonableness." 
Tenenbaum stated that the CPSC expects to publish new 
guidelines on this subject by year-end. 
 
CPSC Office in Beijing Still on Hold 
------------------------------------ 
 
¶8. (U) Throughout her visit, Tenenbaum reiterated the CPSC's 
desire to open its first international office in Beijing to 
boost direct communication with Chinese manufacturers and 
enhance the CPSC's dialogue with PRC officials.  Beijing, 
however, has still not signaled its approval.  Tenenbaum's 
private sector interlocutors in Hong Kong expressed full 
support for a CPSC office in Beijing, noting that it would 
improve their level of dialogue with the CPSC and boost the 
Commission's education and advocacy efforts in China. 
 
¶9. (U) Accompanying Tenenbaum in Hong Kong were CPSC Director 
of International Programs and Intergovernmental Affairs 
Richard O'Brien, Deputy Director of the Office of Compliance 
and Field Operations Marc Schoem, and Legal Advisor to the 
Chairman Matthew Howsare.  CPSC Chairman Tenenbaum has 
cleared this cable. 
MARUT