The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

Congressional research reportNov 5, 2013

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The Consumer Product Safety Commission

(CPSC) and International Trade: Legal Issues

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November 5, 2013

Congressional Research Service

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R43297

The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

Summary

Most consumer products within the jurisdiction of the U.S. Consumer Product Safety

Commission (CPSC) are imported into the United States. The CPSC is the central, federal

authority for the promotion and enforcement of consumer product safety. In 2008, following

several well-publicized national recalls of toys and children’s products, many of which contained

lead, Congress passed the Consumer Product Safety Improvement Act (CPSIA), which included

provisions addressing the CPSC’s role in ensuring the safety of imported and exported consumer

products.

With regard to import safety, the CPSC acts in coordination with U.S. Customs and Border

Protection (CBP), Department of Homeland Security, to evaluate the safety of consumer products

offered for import into U.S. customs territory. Working together with CBP, the CPSC attempts to

identify shipments that are likely to contain consumer products which violate import provisions

that the agency enforces. The CPSC also determines whether to admit certain consumer products

offered for import into U.S. customs territory. Importers of products manufactured outside of the

United States must certify that finished products comply with all rules, bans, standards, or

regulations applicable to the product under any act enforced by the CPSC.

The export of consumer products from the United States to foreign countries may also be subject

to regulation by the CPSC. In the CPSIA, Congress provided that, among other things, the CPSC

may prohibit the export from the United States for the purpose of sale any consumer product that

violates a safety rule under the Consumer Product Safety Act (CPSA) unless the importing

country informs the CPSC that it accepts the importation of the consumer product.

In addition to domestic laws pertaining to the CPSC’s regulation of the import and export of

consumer products, the United States has also agreed to undertake certain international

obligations with respect to the promulgation of standards-related measures (e.g., product safety

regulations) by its central government bodies, including the CPSC. These obligations are found in

several international agreements to which the United States is party, including the multilateral

World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT Agreement),

as well as bilateral and regional U.S. free trade agreements (FTAs). Among other things, the TBT

Agreement establishes rules pertaining to the promulgation of technical regulations by central

government bodies like the CPSC, including rules concerning nondiscrimination, transparency,

and reliance on international standards as a basis for regulations. U.S. FTAs also contain

additional obligations for certain parties with regard to transparency. Standards-related trade

obligations have been implemented in U.S. law, particularly in the Trade Agreements Act of 1979.

In the 113th Congress, H.R. 1910, the Foreign Manufacturers Legal Accountability Act of 2013,

would require the Chairman of the CPSC to mandate that certain foreign manufacturers and

producers of consumer products distributed in commerce establish a registered agent in the

United States to accept service of process on behalf of such manufacturer or producer for the

purpose of any state or federal regulatory proceeding or civil action related to the product.

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The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

Contents

Introduction...................................................................................................................................... 1

Jurisdiction of the Consumer Product Safety Commission ............................................................. 2

Import Safety ................................................................................................................................... 3

Product Surveillance .................................................................................................................. 3

Prohibited Acts .......................................................................................................................... 4

Admissibility Determinations .................................................................................................... 5

Certificates of Compliance ........................................................................................................ 6

Export of Consumer Products .......................................................................................................... 7

Standards-Related International Trade Obligations ......................................................................... 9

World Trade Organization: Agreement on Technical Barriers to Trade .................................... 9

U.S. Free Trade Agreements .................................................................................................... 11

Implementation of International Standards-Related Obligations in U.S. Law ........................ 12

Legislation in the 113th Congress: H.R. 1910 ................................................................................ 13

Overview ................................................................................................................................. 13

Potential WTO Implications of the Registration Requirement ................................................ 14

GATT Article III:4 ............................................................................................................. 14

GATT Article XX(b) and (d) Exceptions .......................................................................... 15

Possible Result of a WTO Challenge to H.R. 1910........................................................... 16

Conclusion ..................................................................................................................................... 16

Contacts

Author Contact Information........................................................................................................... 17

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The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

Introduction

Most consumer products under the jurisdiction of the Consumer Product Safety Commission

(CPSC) are imported into the United States.1 Each day in 2011, almost $1.8 billion in such

products entered the United States from 800,000 importers at 327 U.S. ports, according to

statistics compiled by the CPSC.2 More than 80% of the 473 consumer product recalls announced

by the CPSC in FY2007 were recalls of imported products, and many of these products originated

in China.3 More recently, the CPSC reported that the agency, along with U.S. Customs and

Border Protection (CBP), Department of Homeland Security, had stopped millions of units of

imported consumer products that violated U.S. safety rules from reaching consumers in FY2012.4

In response to several recalls of lead-contaminated toys that had been manufactured in foreign

countries such as China and imported into the United States, Congress passed the Consumer

Product Safety Improvement Act (CPSIA) in 2008.5 Among other things, the act contained new

requirements for testing and certification of consumer products, as well as provisions addressing

the CPSC’s role with regard to the import and export of consumer products.6

Overseeing the safety of imported consumer products in cooperation with CBP is one of the roles

that the CPSC plays with respect to international trade in consumer products that are under its

jurisdiction.7 The CPSC may also prohibit the export for sale of certain consumer products from

the United States to foreign countries.8 In addition, the CSPC is responsible for promulgating and

enforcing certain mandatory product safety rules, bans, and standards.9 The CPSC relies on

voluntary standards issued by other bodies “whenever compliance with such voluntary standards

would eliminate or adequately reduce the risk of injury addressed and it is likely that there will be

substantial compliance with such voluntary standards.”10 However, in some circumstances, the

CPSC promulgates its own regulations or Congress enacts a standard.11 The United States has

undertaken international obligations with respect to the promulgation of technical regulations by

central government bodies like the CPSC.12 These obligations are contained in World Trade

Organization (WTO) agreements such as the Agreement on Technical Barriers to Trade, as well as

CPSC, International Activities, https://www.cpsc.gov/en/Business--Manufacturing/International/.

CPSC, Fiscal Year 2013 Operating Plan 40 (2013), http://www.cpsc.gov/Global/Budget/2013OperatingPlan.pdf.

CPSC, Import Safety Strategy 3 (2008), http://www.cpsc.gov/PageFiles/127661/importsafety.pdf.

Press Release, Port Surveillance News: More than 4.8M Units of Violative Imported Products Kept at Bay During

Fiscal Year 2012 (July 26, 2013), http://www.cpsc.gov/en/Newsroom/News-Releases/2013/More-than-48M-Units-ofViolative-Imported-Products-Kept-at-Bay-During-Fiscal-Year-2012/.

P.L. 110-314; David Barboza & Louise Story, Mattel Issues New Recall of Toys Made in China, N.Y. Times, Aug.

14, 2007, http://www.nytimes.com/2007/08/14/business/15toys-web.html?em&ex=1187236800&en=

bd108f5b0c2fd997&ei=5087%0A&_r=0.

P.L. 110-314 §§102, 221-225.

15 U.S.C. §2066 note.

Id. §2067.

E.g., id. §§2056, 2058, 2064.

Id. §2056(b)(1); CPSC, Voluntary Standards, http://www.cpsc.gov/en/Regulations-Laws--Standards/VoluntaryStandards/.

See, e.g., 16 C.F.R. Part 1212 (setting forth the safety standard for multi-purpose lighters); 15 U.S.C. §2056b

(codifying most of the voluntary toy safety standard by ASTM International (formerly known as the American Society

for Testing and Materials (ASTM)) into U.S. law.

Agreement on Technical Barriers to Trade (TBT Agreement), Art. 2.

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U.S. free trade agreements (FTAs).13 Standards-related trade obligations have been implemented

in U.S. law, particularly in the Trade Agreements Act of 1979.14

This report examines the CPSC’s role in regulating U.S. imported and exported consumer

products.15 It also examines some of the international obligations that the United States has

undertaken with respect to the promulgation of standards-related measures, such as mandatory

consumer product safety regulations.

Jurisdiction of the Consumer Product Safety

Commission

This report focuses on consumer products that fall within the jurisdiction of the CPSC. In 1972,

the Consumer Product Safety Act (CPSA) established the CPSC as an independent federal

regulatory agency tasked with protecting consumers against unreasonable risk of injury from

hazardous products.16 The CPSC has responsibility for administering and enforcing several

federal consumer product safety laws, including the CPSA,17 the Federal Hazardous Substances

Act (FHSA),18 the Flammable Fabrics Act (FFA),19 the Poison Prevention Packaging Act of

1970,20 and the Refrigerator Safety Act of 1956,21 among others.

The CPSC exercises regulatory jurisdiction over consumer products as defined in the CPSA. The

act defines “consumer product” as “any article, or component part thereof, produced or

distributed (i) for sale to a consumer for use in or around a permanent or temporary household or

residence, a school, in recreation, or otherwise, or (ii) for the personal use, consumption or

enjoyment of a consumer in or around a permanent or temporary household or residence, a

school, in recreation, or otherwise.”22

The CPSC lacks jurisdiction over certain products, including tobacco and tobacco products,

motor vehicles or motor vehicle equipment, pesticides, firearms and ammunition, aircraft and

components, boats and other marine vessels, drugs, medical devices, cosmetics, food, or any

article that is not customarily produced or distributed for sale to, or use or consumption by, or

enjoyment of, a consumer.23 In addition, the CPSC lacks jurisdiction to regulate a risk of injury

associated with a consumer product if such risk could be eliminated or reduced to a sufficient

extent by actions taken under the Occupational Safety and Health Act, Atomic Energy Act, or

See, e.g., TBT Agreement, Art. 2; North American Free Trade Agreement, Chapter 9.

19 U.S.C. Chapter 13, Subchapter II.

For more on the role that CBP plays in facilitating trade, enforcing customs laws, and securing U.S. ports, see CRS

Report R43014, U.S. Customs and Border Protection: Trade Facilitation, Enforcement, and Security, by (name reda

cted) and (name redacted).

15 U.S.C. §2053; H. Rept. 92-1593, at 1, 32 (1972) (Conf. Rep.).

15 U.S.C. §§2051-2089.

Id. §§1261-1278a.

Id. §§1191-1204.

Id. §§1471-1477.

Id. §§1211-1214.

Id. §2052(a)(5).

Id.

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Clean Air Act.24 The CPSC also lacks the authority to regulate the risk of injury associated with

electronic product radiation emitted from an electronic product if such risk of injury is subject to

regulation under a certain provision of the Public Health Service Act.25

Import Safety

The CPSC plays a major role in evaluating the safety of consumer products offered for import

into U.S. customs territory.26 In cooperation with CBP, the CPSC attempts to identify shipments

intended for import that are likely to contain consumer products that violate import provisions

enforced by the agency.27 The CPSC also determines whether to admit certain consumer products

offered for import into U.S. customs territory.28 The CPSA, as amended, sets forth several

prohibited acts involving importation and provides penalties for parties that engage in these

acts.29 Under the amended CPSA and its implementing regulations, importers of finished products

manufactured outside of the United States must certify that the products comply with all rules,

bans, standards, or regulations applicable to the products under any act enforced by the CPSC.30

Importers have other responsibilities under the CPSA that are the same as those of manufacturers,

including the responsibility to report consumer product safety problems to the CPSC.31 Under the

FHSA and FFA, importers have responsibilities comparable to those of domestic manufacturers

and distributors.32

Product Surveillance

The CPSC is required to maintain a permanent program for the surveillance of products offered

for import into the customs territory of the United States.33 According to the CPSIA, the CPSC

must develop a risk assessment methodology to identify shipments intended for import that are

likely to contain products that violate import provisions enforced by the agency.34 The CPSC’s

Office of Import Surveillance coordinates its efforts to identify and examine incoming shipments

of consumer products with CBP.35

The CPSIA sought to encourage the CPSC and CBP to cooperate further in the evaluation of the

safety risks posed by consumer products entering the customs territory of the United States. For

example, it tasked the CPSC with developing a plan for sharing information with CBP in order to

Id. §2080.

Id.

Id. §2066.

Id. §2066 note.

Id. §2066.

Id. §§2068(a), 2069.

Id. §2063; 16 C.F.R. §1110.7.

15 U.S.C. §2064(b); id. §2052(a)(11) (defining “manufacturer” to include importers).

Id. §1274(f); id. §1198.

Id. §2066(h).

Id. §2066 note.

CPSC, Import Safety, http://www.cpsc.gov/en/Business--Manufacturing/Import-Safety/.

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identify shipments of violative consumer products.36 In April 2010, the CPSC and CBP signed a

memorandum of understanding in which the CBP agreed to allow the CPSC to use shipment data

in its Automated Commercial System to evaluate imports for safety risks.37 In October 2010, the

CPSC signed a memorandum of understanding with CBP and several other federal agencies in

which the parties agreed to share information about the safety of products imported into the

United States through an interagency Import Safety Commercial Targeting and Analysis Center.38

The CPSC also maintains memoranda of understanding with consumer product safety agencies in

foreign countries in an effort to increase the compatibility of the parties’ consumer product safety

laws and to promote the sharing of publicly available information about unsafe consumer

products.39

Prohibited Acts

The CPSA, as amended, makes it unlawful for any person to import into the United States any

consumer product or substance under the CPSC’s jurisdiction: (1) that fails to conform with an

applicable consumer product safety rule promulgated by the CPSC under any act enforced by the

agency; (2) to which a manufacturer has taken voluntary corrective action in consultation with the

CPSC, provided that the CPSC notified the public of the action or the importer knew or should

have known about it; (3) that is subject to a CPSC order for a recall or corrective action or a court

order declaring an imminent hazard; or (4) that is a banned hazardous substance.40

Under the CPSA, civil penalties for engaging in prohibited acts involving importation may

include up to $100,000 per knowing violation and, in some circumstances, up to $15 million for

any related series of violations.41 Criminal penalties for knowing and willful violations include up

15 U.S.C. §2066 note.

Press Release, CBP, CPSC Sign Agreement to Promote Consumer Safety (April 26, 2010), http://www.cbp.gov/

archived/xp/cgov/newsroom/news_releases/archives/2010_news_archive/04262010_2.xml.html. “The Automated

Commercial System (ACS) is the comprehensive system used by [CBP] to track, control, and process all commercial

goods imported into the United States.” CBP, Automated Commercial System, http://www.cbp.gov/ImageCache/cgov/

content/publications/yesyoucan_2epdf/v1/yesyoucan.pdf. The ACS is being replaced by the Automated Commercial

Environment. For more information, see CRS Report R43014, U.S. Customs and Border Protection: Trade

Facilitation, Enforcement, and Security, by (name redacted) and (name redacted).

Import Safety Commercial Targeting and Analysis Center, Memorandum of Understanding Among the Import

Safety Commercial Targeting and Analysis Center, Participating Government Agencies (October 21, 2010),

http://cpsc.gov/PageFiles/97207/mou10212010.pdf.

E.g., Memorandum of Understanding Between the U.S. Consumer Product Safety Commission and the General

Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (April 21, 2004),

http://www.cpsc.gov/PageFiles/114084/mouchina.pdf; Memorandum of Understanding Between the Consumer Product

Safety Commission of the United States of America and the National Institute of Metrology, Standardization, and

Industrial Quality of the Federative Republic of Brazil Regarding Cooperation Related to the Safety of Consumer

Products (June 10, 2011), http://www.cpsc.gov/PageFiles/34316/moubrazil.pdf.

15 U.S.C. §2068(a). There are exceptions for “any person (1) who holds a certificate issued in accordance with

section 14(a) [15 U.S.C. § 2063(a)] to the effect that such consumer product conforms to all applicable consumer

product safety rules, unless such person knows that such consumer product does not conform, or (2) who relies in good

faith on the representation of the manufacturer or a distributor of such product that the product is not subject to an

applicable product safety rule.” Id. §2068(b).

The CPSA also prohibits the importation by any person of any consumer product bearing a registered safety

certification mark owned by an accredited conformity assessment body when the importer knew or should have known

that the mark was used in a manner not authorized by the owner of the certification mark. Id. §2068(a).

Id. §2069.

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to five years’ imprisonment, a fine, or both.42 In addition, a person who commits a criminal

violation of the CPSA or any other act enforced by the CPSC may have to forfeit assets

associated with the violation.43

The FHSA and FFA also contain lists of prohibited acts involving the import or export of

consumer products.44

Admissibility Determinations

The CPSA also sets forth several circumstances in which the CPSC may refuse to admit a

consumer product into the customs territory of the United States.45 These circumstances include

when the product sought to be imported

•

fails to comply with an applicable consumer product safety rule;

•

is not accompanied by certain labels or certificates or, in certain circumstances, is

accompanied by a false certificate;

•

is or has been determined to be an imminently hazardous consumer product in a

proceeding brought under CPSA Section 12;

•

has a product defect that constitutes a substantial product hazard within the

meaning of Section 15(a)(2) of the CPSA; or

•

is a product that was manufactured by a person who is in violation of certain

inspection and recordkeeping requirements.46

When the CPSC wishes to refuse admission of a consumer product into the United States because

it fails to comply with an applicable safety rule or has a product defect that constitutes a

substantial product hazard, it first informs CBP.47 The CPSC may then request that CBP refuse

admission to any such consumer product.48

Upon the CPSC’s request, CBP must deliver samples of consumer products offered for import to

the CPSC for examination so that the agency may determine whether to admit the products.49 If a

product may be refused admission into the United States, the CPSA allows for its delivery from

Id. §2070.

Id.

Id. §1263; id. §1192.

Id. §2066.

Id. §2066(a). According to a CPSC report, under current authority “it is possible to have a product that is the subject

of a prohibited act not be the subject of a refusal of admission.” Staff Report to Congress Pursuant to Section 222 of the

Consumer Product Safety Improvement Act of 2008, Risk Assessment Methodology 11 (September 9, 2011),

http://www.cpsc.gov/PageFiles/112804/cpsia222.pdf. On June 14, 2010, the CPSC began issuing detention notices for

consumer products and hazardous substances under its jurisdiction to the importer of record, the customs broker

handling the transaction, and CBP. CPSC Detention of Products at Import, Frequently Asked Questions,

http://www.cpsc.gov/PageFiles/110297/detentionFAQ.pdf. The CPSC does not take custody of detained products. Id.

CPSC detention decisions are not subject to protest under the Tariff Act. Id.

16 C.F.R. §1115.21(d). The statute and regulations refer to the Secretary of the Treasury although such functions are

now undertaken by CBP pursuant to 19 C.F.R. §§0.1-0.2.

16 C.F.R. §1115.21(d).

15 U.S.C. §2066(b).

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customs custody under bond so that the owner or consignee can modify the product in order for it

to gain admission.50 The CPSA offers the owner or consignee of a product the opportunity for a

hearing under the Administrative Procedure Act regarding the importation of the product.51

The CPSA provides for the destruction of consumer products that are refused admission into the

United States.52 Under an amendment made to the CPSA by the CPSIA, such products must be

destroyed unless the owner, consignee, or importer of record obtains the permission of the

customs authorities to export the products instead.53 If the owner, consignee, or importer obtains

the required approval, that party must export the products within 90 days or they will be

destroyed.54

Other statutes enforced by the CPSC also contain provisions pertaining to the importation of

products or substances that fall within the CPSC’s jurisdiction.55 For example, under FHSA

Section 14, the CBP is authorized to obtain and deliver samples of hazardous substances being

imported or offered for importation to the CPSC, upon its request, for the purpose of inspecting

such samples for compliance with the FHSA.56 The FHSA provides that the CPSC may refuse

admission of hazardous substances that are misbranded, banned, or in violation of Section 4(f) of

the FHSA.57 Under Section 9 of the FFA, imported products subject to flammability standards

under the FFA shall not be released from customs custody except in accordance with Section 499

of the Tariff Act of 1930,58 which provides for release only after inspection by CBP for

compliance with U.S. laws.59

Certificates of Compliance

The CPSA, as amended, contains general conformity certification provisions that apply to

importers of products manufactured outside of the United States.60 These provisions and their

implementing regulations require certification by importers that a finished product complies with

all rules, bans, standards, or regulations applicable to the product under any act enforced by the

CPSC.61 This mandate applies to every product that is (1) subject to a consumer product safety

rule under any act enforced by the CPSC; and (2) imported for consumption or warehousing, or

distributed in commerce.62 For non-children’s products subject to the CPSC’s jurisdiction, such

Id. §2066(c).

Id. §2066(b). There is an exception for “owners or consignees who are or have been afforded an opportunity for a

hearing in a proceeding under section 12 [15 U.S.C. §2061] with respect to an imminently hazardous product.” Id.

Id. §2066(e).

Id.

According to a CPSC policy statement, the agency seeks to “establish, to the maximum extent possible, uniform

import procedures for products subject to the Acts the Commission administers.” 16 C.F.R. §1009.3.

15 U.S.C. §1273.

Id. §1273(a). Regulations governing imports under the FHSA are located at 16 C.F.R. §1500.265-272.

19 U.S.C. §1499.

15 U.S.C. §1198.

Id. §2063(a); 16 C.F.R. §1110.7.

15 U.S.C. §2063(a); 16 C.F.R. §1110.7.

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certifications must be based on a test of the product or a reasonable testing program.63 For

children’s products subject to a children’s product safety rule, the act mandates that every

importer of such product certify compliance based on the testing of the product by an accredited

third-party conformity assessment body.64

Certificates must accompany the applicable product or shipment of products covered by the

certificate.65 The importer must furnish a copy of the certificate to each distributor or retailer of

the product.66 For imported products, the act specifies that the CPSC may, by rule and in

consultation with CBP, provide for the electronic filing of certificates up to 24 hours before an

imported product arrives.67

On May 13, 2013, the CPSC published a proposed regulation in the Federal Register that would

mandate the electronic filing of certificates by importers with CBP for finished products

manufactured outside of the United States, imported for consumption or warehousing, and not

delivered directly to the consumer.68 The electronic filing would have to be made at the time of

filing the CBP entry or the time of filing the entry and entry summary, if both are filed together.69

The proposed rule would also define “importer” as the “importer of record as defined under the

Tariff Act of 1930 (19 U.S.C. §1484(a)(2)(B)).”70 Under the applicable section of the Tariff Act,

an importer of record may be the owner or purchaser of the merchandise or, when appropriately

designated by the owner, purchaser, or consignee of the merchandise, a person holding a valid

customs broker license.71 This means that a validly licensed customs broker (a term that may

include common carriers, contract carriers, third-party logistics providers, and freight forwarders)

that serves as the importer of record when bringing products into the United States would be

required to furnish the applicable certificate under the proposed rule.72

Export of Consumer Products

The CPSA states that the act does not apply to consumer products if it can be shown that they are

manufactured, sold, or held for sale for export from the United States (or if they are imported for

export) and are labeled as intended for export.73 However, the CPSA will apply if the consumer

products are distributed in commerce for use in the United States or the CPSC determines that

exportation of the products presents an unreasonable risk of injury to consumers within the

United States.74

15 U.S.C. §2063(a).

Id.; 16 C.F.R. §1110.7.

15 U.S.C. §2063(g).

Id.

CPSC, Proposed Rule, Certificates of Compliance, 78 Fed. Reg. 28080, 28108 (May 13, 2013) (would be codified at

16 C.F.R. §1110.13).

Id.

Id. at 28107.

19 U.S.C. §1484(a)(2)(B).

CPSC, Proposed Rule, Certificates of Compliance, 78 Fed. Reg. 28080, 28083 (May 13, 2013).

15 U.S.C. §2067(a).

Id. In addition, the CPSA applies to any consumer product “manufactured for sale, offered for sale, or sold for

(continued...)

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An exporter of a consumer product that violates a consumer product safety rule in effect under the

CPSA must, no fewer than 30 days before export, file a statement with the CPSC notifying the

agency of the export.75 Upon receiving such a filing, the CPSC must notify the government of the

importing country of the export and the basis for the safety standard or rule violated.76

The CPSIA amended the CPSA to specify that the CPSC may prohibit a person from exporting

from the United States for the purpose of sale any consumer product that violates a safety rule

promulgated under CPSA unless the importing country has told the CPSC that it accepts the

importation of the consumer product.77 If 30 days have passed since the CPSC provided notice to

the importing country of the impending shipment, the agency “may take such action as

appropriate within its authority with respect to the disposition of the product under the

circumstances.”78 The amendment was intended to put a stop to the export of consumer products

that are in violation of U.S. law.79 The CPSIA also made a similar amendment to the FFA.80

As described above, the CPSA makes it unlawful for persons to engage in certain prohibited acts

with respect to importation.81 Similarly, the CPSA prohibits export from the United States for the

purpose of sale of a product or substance within the jurisdiction of the CPSC that (1) is subject to

a CPSC order for a recall or corrective action, a court order declaring an imminent hazard, or that

is a banned hazardous substance under Section 2(q)(1) of the FHSA; or (2) is subject to a publicly

notified voluntary corrective action taken by the manufacturer, in consultation with the CPSC.82

The FHSA makes it unlawful to fail to notify the CPSC about the export of misbranded hazardous

substances or banned hazardous substances.83

Other statutes enforced by the CPSC contain provisions pertaining to the export of consumer

products, some of which are similar to those under the CPSA. For example, Section 14 of the

FHSA states that “[n]ot less than thirty days before any person exports to a foreign country

any misbranded hazardous substance or banned hazardous substance, such person shall file a

statement with the Commission notifying the Commission of such exportation, and the

Commission, upon receipt of such statement, shall promptly notify the government of such

country of such exportation and the basis upon which such substance is considered

misbranded or has been banned under this Act.”84 The FFA contains a similar provision.85

(...continued)

shipment to any installation of the United States located outside of the United States.” Id.

Id. §2067(b).

Id.

Id. §2067(c).

Id. This section does not apply to the export of a consumer product permitted by the customs authorities pursuant to

15 U.S.C. §2066(e). 15 U.S.C. §2067(d).

H.Rept. 110-501, at 42 (2007).

15 U.S.C. §1202(d).

Id. §2068.

Id. §2068(a)(15). This section does not apply to the export of a consumer product permitted by the customs

authorities pursuant to 15 U.S.C. §2066(e). 15 U.S.C. §2067(d).

15 U.S.C. §1263(i).

Id. §1273(d). Regulations governing the procedures for export of noncomplying, misbranded, or banned products

under the CPSA, FHSA, and FFA are located at 16 C.F.R. §1019.1-.8.

15 U.S.C. §1202(c).

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Standards-Related International Trade Obligations

Some international trade agreements classify measures that regulate on the basis of a product’s

characteristics or processes and production methods as technical regulations, standards, or

conformity assessment procedures.86 These measures are commonly referred to as “standardsrelated measures” or, when they act as obstacles to international trade, “technical barriers to

trade.”87 Several international agreements contain obligations for the United States with respect to

the promulgation of standards-related measures such as product safety regulations promulgated

by the CPSC or product safety laws enacted by Congress. These obligations have been

implemented in U.S. law.88

Standards-Related Measures as Defined in the TBT Agreement

Technical Regulation: Document which lays down product characteristics or their related processes and

production methods, including the applicable administrative provisions, with which compliance is mandatory. It may

also include or deal exclusively with terminology, symbols, packaging, marking, or labelling requirements as they apply

to a product, process, or production method.

Standard: Document approved by a recognized body89 that provides, for common and repeated use, rules,

guidelines, or characteristics for products or related processes and production methods, with which compliance is

not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking, or labelling

requirements as they apply to a product, process, or production method.

Conformity Assessment Procedures: Any procedure used, directly or indirectly, to determine that relevant

requirements in technical regulations or standards are fulfilled.

Source: TBT Agreement, Annex 1.

World Trade Organization: Agreement on Technical Barriers

to Trade

The World Trade Organization (WTO) is an international body created to facilitate trade among

its members.90 To become a member of the WTO, a country or eligible customs territory must

agree to follow certain trade rules.91 These obligations are contained in sources that include the

Agreement Establishing the World Trade Organization (WTO Agreement) and the multilateral

trade agreements annexed to it.92 One of the multilateral agreements annexed to the WTO

Agreement is the Agreement on Technical Barriers to Trade (TBT Agreement). The TBT

Agreement seeks to ensure that standards-related measures do not create unnecessary obstacles to

E.g., TBT Agreement, Annex 1.

United States Trade Representative, 2013 Report on Technical Barriers to Trade 5-6, http://www.ustr.gov/sites/

default/files/2013%20TBT.pdf.

E.g., 19 U.S.C. Chapter 13, Subchapter II.

The term “recognized body” most commonly refers to an international standard-setting body such as ASTM

International. For more on this standards-setting body, see About ASTM International, http://www.astm.org/ABOUT/

overview.html.

Agreement Establishing the World Trade Organization, Art. II.

Id.

These agreements are often referred to collectively as the “WTO agreements.”

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The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

international trade while at the same time allowing WTO Members to take actions necessary, for

example, to protect human health and the environment.93

In the United States, the CPSC is the central federal authority responsible for promulgating

mandatory consumer product regulations, standards, and bans.94 As noted above, the CPSC relies

on voluntary standards issued by other bodies “whenever compliance with such voluntary

standards would eliminate or adequately reduce the risk of injury addressed and it is likely that

there will be substantial compliance with such voluntary standards.”95 However, in some

circumstances, the CPSC promulgates its own regulations or Congress enacts a standard.96 The

disciplines of the TBT Agreement apply to standards-related measures, including those put in

place by central government bodies.97 Thus, the United States has an obligation to ensure that its

central government bodies, including federal agencies like the CPSC,98 comply with the

disciplines of the TBT Agreement.99 If a WTO Member believes that a statutory standard or

regulatory practice of the United States is not in compliance with the country’s obligations under

the TBT Agreement, the Member may challenge the statutory standard or regulatory practice as

constituting a violation of the United States’ obligations under that agreement.100 Consultations

and dispute settlement under the TBT Agreement are governed by the dispute settlement rules of

the General Agreement on Tariffs and Trade and the Dispute Settlement Understanding.101

One example of what the TBT Agreement requires of WTO Members is found in the rules

governing the preparation, adoption, and application of mandatory technical regulations by

central government bodies.102 Under the agreement’s national treatment and most favored nation

provisions, the United States must ensure that the CPSC, when imposing mandatory technical

regulations, does not treat imported products less favorably than like domestic products or like

products imported from other countries.103 In addition, in order to ensure that technical

regulations do not create unnecessary obstacles to international trade, technical regulations must

not be “more trade-restrictive than necessary to fulfill a legitimate objective, taking account of the

TBT Agreement, Preamble. The obligations of the TBT Agreement are in addition to those for WTO Members under

the General Agreement on Tariffs and Trade (GATT) 1994. See Appellate Body Report, EC—Measures Affecting

Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, ¶ 80 (March 12, 2001). Additional obligations

contained in the GATT 1994 are beyond the scope of this report. For more on general GATT obligations, see CRS

Report R41306, Trade Law: An Introduction to Selected International Agreements and U.S. Laws, by (name reda

cted).

15 U.S.C. §§2056, 2058, 2064.

Id. §2056(b)(1); CPSC, Voluntary Standards, http://www.cpsc.gov/en/Regulations-Laws--Standards/VoluntaryStandards/.

See, e.g., 16 C.F.R. Part 1212 (setting forth the safety standard for multi-purpose lighters); 15 U.S.C. §2056b

(codifying most of ASTM International’s voluntary toy safety standard into U.S. law).

TBT Agreement, Arts. 2, 4, 5, Annex 1. The disciplines do not apply to sanitary and phytosanitary measures or

purchasing specifications prepared by governmental bodies addressed in the Agreement on Government Procurement.

TBT Agreement, Arts. 1.4, 1.5.

The TBT Agreement defines “central government body” as the “central government, its ministries and departments

or any body subject to the control of the central government in respect of the activity in question.” TBT Agreement,

Annex 1.

TBT Agreement, Art. 2.

100

See TBT Agreement, Art. 14; Understanding on Rules and Procedures Governing the Settlement of Disputes, Art. 3.

101

TBT Agreement, Art. 14.

102

TBT Agreement, Art. 2.

103

TBT Agreement, Art. 2.1. These national treatment and most-favored-nation obligations are basic WTO principles

articulated in the GATT. See GATT Arts. I, III.

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The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

risks non-fulfillment would create.”104 Among the non-exhaustive list of legitimate objectives

provided in the agreement is the “protection of human health or safety.”105 Members have an

ongoing obligation to reassess their technical regulations to ensure that circumstances or

objectives still require them and that they are the least trade-restrictive means of addressing such

circumstances or objectives.106

In addition to these obligations, the TBT Agreement calls upon Members to use relevant

international standards as a basis for their mandatory technical regulations except when they

would not effectively assist the Member in fulfilling its legitimate objectives.107 The agreement

also states that Members should specify technical regulations based on product requirements in

terms of performance rather than design or descriptive characteristics wherever appropriate.108

The agreement also contains provisions intended to increase the transparency of central

government bodies’ promulgation of mandatory technical regulations. If the CPSC proposes a

technical regulation that may have a significant effect on the trade of other Members in the

absence of, or in deviation from, a relevant international standard, the agreement obligates the

United States to notify interested parties in other Members and allow them to comment on the

proposal.109 WTO Members must make adopted technical regulations available to interested

parties in other Members.110

U.S. Free Trade Agreements

U.S. free trade agreements (FTAs) contain additional obligations for the United States with

respect to standards-related measures, including technical regulations. Chapter Seven of the

United States-Panama Trade Promotion Agreement contains provisions that are typical of those

found in recent FTAs. That chapter, which is titled “Technical Barriers to Trade,” applies to “all

standards, technical regulations, and conformity assessment procedures of the Parties’ central

government bodies that may, directly or indirectly, affect trade in goods between the Parties.”111

However, the scope of the chapter does not extend to technical specifications prepared by

governmental bodies for the purposes of government production or procurement or to sanitary

and phytosanitary measures.112

104

TBT Agreement, Art. 2.2. A WTO panel has noted that this test involves a two-step inquiry: (1) whether a technical

regulation pursues a legitimate objective; and (2) whether the technical regulation is more trade-restrictive than

necessary to fulfill that legitimate objective taking into account the risks non-fulfillment would create. Panel Report,

US—Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, ¶ 7.382.387 (September 15, 2011).

105

TBT Agreement, Art. 2.2.

106

TBT Agreement, Art. 2.3; Panel Report, European Communities—Trade Description of Sardines, WT/DS231/R, ¶

7.80-.81 (May 29, 2002).

107

TBT Agreement, Art. 2.4.

108

TBT Agreement, Art. 2.8.

109

TBT Agreement, Art. 2.9. The agreement contains an exception to some of these requirements for “urgent problems

of safety, health, environmental protection or national security.” TBT Agreement, Art. 2.10.

110

TBT Agreement, Art. 2.11.

111

U.S.-Panama Trade Promotion Agreement, Art. 7.2.

112

Id.

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The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

A main additional obligation for the United States contained in the chapter is in the area of

transparency. For example, the agreement requires each party to permit persons of the other party

to participate in the development of standards, technical regulations, and conformity assessment

procedures on terms no less favorable than those accorded to its own persons.113 A party

publishing notice under the TBT Agreement of a mandatory technical regulation that may have a

significant effect on the trade of other Members in the absence of, or in deviation from, a relevant

international standard must include a statement detailing the objective of the proposed technical

regulation and the rationale for the proposed approach.114 The provision contains additional

obligations requiring parties to allow time for comments to be received in writing from the other

party on the proposal and mandating that parties make available to the public their responses to

significant comments no later than when they publish final regulations.115

Proposed free trade agreements may also contain provisions pertaining to standards-related

measures. For example, negotiators of the proposed Trans-Pacific Partnership (TPP) agreement

are including annexes on sector-specific TBT commitment to harmonize their approaches to

regulations in key areas.116

Implementation of International Standards-Related Obligations

in U.S. Law

As described above, several international agreements contain obligations for the United States

pertaining to standards-related measures such as mandatory product safety regulations. These

obligations include requirements regarding nondiscrimination, transparency, and the use of

international standards as a basis for regulations.117 International trade obligations of the United

States pertaining to standards-related measures have been implemented in domestic laws

applicable to the CPSC, particularly in the Trade Agreements Act (TAA) of 1979.118

The TAA states that “[n]o Federal agency may engage in any standards-related activity that

creates unnecessary obstacles to the foreign commerce of the United States.”119 Among other

things, the act requires federal agencies to ensure that they treat imported products no less

favorably than like domestic or imported products with regard to the application of standardsrelated measures (e.g., product safety regulations) to these products.120 The TAA requires federal

agencies developing standards to take into consideration international standards and to base their

standards on international standards when appropriate.121 Under the act, the United States Trade

113

U.S.-Panama Trade Promotion Agreement, Art. 7.7.

Id.

115

Id.

116

For more information on the TPP, see CRS Report R42694, The Trans-Pacific Partnership Negotiations and Issues

for Congress, coordinated by (name redacted).

117

E.g., TBT Agreement, Arts. 2.1, 2.4, 2.9. 2.11.

118

19 U.S.C. Chapter 13, Subchapter II.

119

19 U.S.C. §2532. The TAA’s definition of “federal agency” includes any “independent establishment,” and thus it

appears that the CPSC, which is an independent regulatory commission, is subject to the act. Id. §2571.

120

Id. §2532.

121

Id.

114

Congressional Research Service

The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

Representative must consult with federal agencies that have expertise in standards-related matters

that are the subject of trade negotiations with foreign countries.122

In addition to the requirements of the TAA, the rulemaking provisions contained in the

Administrative Procedure Act, CPSA, and other acts enforced by the CPSC could be considered

to implement standards-related trade obligations of the United States.123 These provisions increase

transparency by requiring the CPSC to involve the public in its rulemaking proceedings and to

consider comments from outside parties, including foreign parties, prior to promulgating a final

rule.124

Legislation in the 113th Congress: H.R. 1910

Overview

H.R. 1910, the Foreign Manufacturers Legal Accountability Act of 2013, was introduced in the

House on May 9, 2013. The bill shares some similarities with bills introduced in prior Congresses

that sought to hold foreign manufacturers—including Chinese manufacturers of toxic drywall—

legally responsible for harms caused by their products in the United States.125 Among other

things, H.R. 1910 would require the Chairman of the CPSC to mandate that certain foreign

manufacturers and producers of consumer products distributed in commerce establish a registered

agent in the United States.126 This agent would have to be authorized to accept service of process

on behalf of such manufacturer or producer for the purpose of any state or federal regulatory

proceeding or civil action related to the product.127 The requirement would apply “if such service

is made in accord with the State or Federal rules for service of process in the State in which the

regulatory action or case is brought.”128 When a foreign manufacturer or producer registered an

agent, it would be deemed to have consented to the personal jurisdiction of the state or federal

courts in which the registered agent is located for the purposes of proceedings related to the

product.129

Furthermore, the bill would require a person importing a consumer product under the CPSC’s

jurisdiction that is manufactured or produced outside of the United States to furnish to CBP a

declaration that such person has made an “appropriate inquiry” as to whether the manufacturer or

122

Id. §2541.

See United States Trade Representative, 2013 Report on Technical Barriers to Trade 19, http://www.ustr.gov/sites/

default/files/2013%20TBT.pdf.

124

5 U.S.C. §553; 15 U.S.C. §2058.

125

H.R. 4678, Foreign Manufacturers Legal Accountability Act, and H.R. 5156, Clean Energy Technology

Manufacturing and Export Assistance Act: Hearing Before the Subcomm. on Commerce, Trade, and Consumer

Protection of the H. Comm. on Energy and Commerce, 111th Cong. 2 (2010) (statement of Sen. Bobby Rush,

Chairman, Subcomm. on Commerce, Trade, and Consumer Protection).

126

H.R. 1910, §5.

127

Id.

128

Id. The bill would instruct the Secretary of Commerce to compile a current list of agents registered in this manner.

Id.

129

Id.

123

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The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

producer of the consumer product has complied with the registration requirements.130 The failure

to file a declaration or the filing of a false declaration could subject a person to penalties.131

Potential WTO Implications of the Registration Requirement

GATT Article III:4

If H.R. 1910 became law, there could be implications for the United States under WTO rules.

Article III:4 of the General Agreement on Tariffs and Trade 1994 (GATT) contains the national

treatment requirement for internal regulation.132 It states that the “products of the territory of any

[Member] imported into the territory of any other [Member] shall be accorded treatment no less

favourable than that accorded to like products of national origin in respect of all laws, regulations

and requirements affecting their internal sale, offering for sale, purchase, transportation,

distribution or use.”133 If a WTO panel applied the test to determine whether H.R. 1910 (if it

became law) discriminated against imported products because manufacturers of these products

would be subject to registration requirements not imposed on manufacturers of like domestic

products, the panel would face two main questions: (1) whether the registration requirement

imposed by H.R. 1910 on foreign manufacturers constituted a law, regulation, or requirement

affecting the internal sale, offering for sale, purchase, transportation, distribution, or use of the

products made by the manufacturers and imported into the United States; and (2) whether, as a

result of this requirement, the imported products received less favorable treatment than the like

domestic products.134

With regard to (1), a GATT panel has held that

the drafters of the Article intended to cover in paragraph 4 not only laws and regulations

which directly governed the conditions of sale or purchase but also any laws or regulations

which might adversely modify the conditions of competition between the domestic and

imported products on the internal market.135

Under H.R. 1910, foreign manufacturers would bear the costs of complying with the registration

requirement. Higher costs could lead these manufacturers to raise the prices of their products.

This could lead to the sale of the products at higher prices on the U.S. market, making the

products less competitive with domestically manufactured products. Thus, the registration

requirement could potentially be a requirement affecting the products’ internal sale or purchase

that is covered by Article III:4.

With respect to (2), it is unclear whether the registration requirement results in less favorable

treatment for imported products as compared to like domestic products. On the one hand, as

130

Id.

132

GATT, Art. III:4.

133

Id.

134

Appellate Body Report, Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R,

¶ 133 (December 11, 2000); Peter Van Den Bossche, The Law and Policy of the World Trade Organization 368 (2d ed.

2008).

135

GATT Panel Report, Italy—Discrimination Against Imported Agricultural Machinery, L/833 - 7S/60, ¶ 12 (October

23, 1958).

131

Congressional Research Service

The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

indicated above, the requirement could lead to higher prices for imported products on the internal

market, subjecting them to less favorable treatment by denying them “effective equality of

competitive opportunities.”136 On the other hand, the fact that like domestic and imported

products are treated differently does not automatically mean that imported products are treated

less favorably.137 It could be argued that H.R. 1910 merely “levels the playing field” for domestic

products by making the foreign manufacturers of imported products subject to legal liability just

as domestic manufacturers are. To summarize, although it is unclear whether imported products

are in fact treated less favorably than like domestic products under the registration requirement, it

is possible that a WTO panel could find that the requirement violates the national treatment

obligation contained in Article III:4 of the GATT.

GATT Article XX(b) and (d) Exceptions

If H.R. 1910 is adopted and later found to violate the requirements of the GATT, the United States

could potentially justify the registration requirement under the exceptions provided at Article

XX(b) and (d) of the GATT.138 The defending Member has the burden, at that point, of proving

that the measure both fits under one of the exceptions under Article XX and satisfies the

requirements imposed by Article XX’s opening clauses, which form its “chapeau.”139

Article XX(b) provisionally justifies GATT-inconsistent measures “necessary to protect human,

animal or plant life or health.”140 Presumably, the objective of the registration requirement is the

protection of the life and health of the people who come into contact with unsafe consumer

products manufactured by foreign companies. Article XX(d) provisionally justifies GATTinconsistent measures “necessary to secure compliance with laws or regulations which are not

inconsistent with the provisions of [the GATT].”141 The registration requirement is arguably

designed to secure foreign manufacturers’ compliance with U.S. consumer product safety laws,

which are presumably consistent with the GATT.

Both the Article XX(b) and XX(d) exceptions require a showing of necessity.142 Under Article

XX(b), if a Member makes a prima facie case that its measure is “necessary,” this initial finding

may ultimately be rejected if the panel finds that a less trade restrictive alternative was

“reasonably available.”143 Similarly, under Article XX(d) the Appellate Body has held that panels

should consider whether a WTO-consistent alternative measure that the Member “could

reasonably be expected to employ” is available, or whether a less WTO-inconsistent measure is

“reasonably available.”144

136

GATT Panel Report, US—Section 337, L/6439—36S/345, ¶ 5.11 (November 7, 1989); Van Den Bossche, supra

note 134, at 383.

137

GATT Panel Report, US—Section 337, ¶ 5.11.

138

GATT, Art. XX(b), (d).

139

Appellate Body Report, U.S.—Standards for Reformulated and Conventional Gasoline, 22, WT/DS2/AB/R (April

29, 1996); Panel Report, China—Measures Related to the Exportation of Various Raw Materials, ¶ 7.359,

WT/DS394/R (July 5, 2011).

140

GATT, Art. XX(b).

141

GATT, Art. XX(d).

142

GATT, Art. XX(b), (d).

143

Appellate Body Report, Brazil—Measures Affecting Imports of Retreaded Tyres, ¶ 156, WT/DS332/AB/R

(December 3, 2007).

144

Appellate Body Report, Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef, ¶ 166; Van Den

(continued...)

Congressional Research Service

The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

Finally, if a measure is provisionally justified under Article XX(b) or (d), it must also satisfy the

Article XX chapeau.145 The chapeau states that a measure covered by Article XX must be neither

“a disguised restriction on international trade” nor “applied in a manner which would constitute a

means of arbitrary or unjustifiable discrimination between countries where the same conditions

prevail.”146

Possible Result of a WTO Challenge to H.R. 1910

If H.R. 1910 became law and a WTO Member challenged it as constituting a violation of the

United States’ obligations under the GATT, a WTO panel or the Appellate Body could potentially

determine that the law is inconsistent with one or more of the articles of the GATT and not

justified by an exception to the GATT’s requirements.147 If the United States did not then bring

the law into conformity with the recommendations or rulings of a panel or the Appellate Body

that had been adopted by the Dispute Settlement Body (DSB), then the DSB could authorize the

complaining member to retaliate by, for example, suspending its application of certain tariff

concessions to the United States.148

Conclusion

Enforcing consumer product safety laws at the border remains a priority for the CPSC and

CBP.149 In 2008, following widely publicized recalls of children’s toys, Congress passed the

CPSIA.150 Among other things, the act contained provisions modifying the CPSC’s role and

authority with regard to the import and export of consumer products.151

Some Members of Congress have proposed additional legislation to address the potential harm

caused by imported products. H.R. 1910, the Foreign Manufacturers Legal Accountability Act of

2013, was introduced in the House on May 9, 2013. The bill shares some similarities with bills

introduced in prior Congresses that sought to hold foreign manufacturers legally responsible for

the harms caused by their products in the United States.152 Among other things, H.R. 1910 would

(...continued)

Bossche, supra note 134, at 633.

145

Appellate Body Report, U.S.—Standards for Reformulated and Conventional Gasoline, 22-23, WT/DS2/AB/R

(April 29, 1996).

146

GATT, Art. XX.

147

See Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Art. 19.

148

DSU, Art. 22.

149

Press Release, Port Surveillance News: More than 4.8M Units of Violative Imported Products Kept at Bay During

Fiscal Year 2012 (July 26, 2013), http://www.cpsc.gov/en/Newsroom/News-Releases/2013/More-than-48M-Units-ofViolative-Imported-Products-Kept-at-Bay-During-Fiscal-Year-2012/.

150

P.L. 110-314; David Barboza & Louise Story, Mattel Issues New Recall of Toys Made in China, N.Y. Times, Aug.

14, 2007, http://www.nytimes.com/2007/08/14/business/15toys-web.html?em&ex=1187236800&en=

bd108f5b0c2fd997&ei=5087%0A&_r=0.

151

P.L. 110-314 §§102, 221-225.

152

H.R. 4678, Foreign Manufacturers Legal Accountability Act, and H.R. 5156, Clean Energy Technology

Manufacturing and Export Assistance Act: Hearing Before the Subcomm. on Commerce, Trade, and Consumer

Protection of the H. Comm. on Energy and Commerce, 111th Cong. 2 (2010) (statement of Sen. Bobby Rush,

Chairman, Subcomm. on Commerce, Trade, and Consumer Protection).

Congressional Research Service

The Consumer Product Safety Commission (CPSC) and International Trade: Legal Issues

require the Chairman of the CPSC to mandate that certain foreign manufacturers and producers of

consumer products distributed in commerce establish a registered agent in the United States.153

If H.R. 1910 became law, it could potentially be subject to challenge before a WTO panel on the

grounds that it violates the national treatment requirement contained in Article III:4 of the GATT

by requiring foreign manufacturers to bear the costs of establishing a registered agent and

becoming subject to product liability lawsuits, therefore possibly hurting the competitiveness of

the manufacturers’ products in the U.S. market as a result of higher product prices.154 On the other

hand, H.R. 1910 could be characterized as simply “leveling the playing field” for domestic

products and not as treating imported products any less favorably.155

If H.R. 1910 is adopted and later found to violate the requirements of the GATT, the United States

could potentially justify the registration requirement under the exceptions provided at Article

XX(b) and (d) of the GATT.156 Both of these exceptions may require the complaining Member to

identify possible alternative measures available to the defending Member that would be

consistent—or at least less inconsistent—with the GATT.157 If a measure is provisionally justified

under Article XX(b) or (d), it must also satisfy the Article XX chapeau.158

Author Contact Information

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

153

H.R. 1910, §5.

See the discussion at “GATT Article III:4” above.

155

Id.

156

See the discussion at “GATT Article XX(b) and (d) Exceptions” above.

157

See Appellate Body Report, Brazil—Measures Affecting Imports of Retreaded Tyres, ¶ 156, WT/DS332/AB/R

(December 3, 2007)

158

Appellate Body Report, U.S.—Standards for Reformulated and Conventional Gasoline, 22-23, WT/DS2/AB/R

(April 29, 1996).

154

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