Senate Bill has a potential to disrupt U.S.-China Trade

The Senate approved a measure on Thursday to overhaul the consumer product laws and strengthen the safety agency that oversees the marketplace. Besides increasing the staff and budget of the Consumer Product Safety Commission, the legislation would create "a public database of complaints about products and empower state prosecutors to act if they think the federal government is not doing enough to protect consumers."
The bill would make mandatory many toy safety standards that are now voluntary and as part of that change require that toys be tested in compliance with a comprehensive set of rules.
The bill would also increase the possible maximum penalty for violations to $20 million, from the current $1.25 million. And it would make it a crime for a company to sell a product that has been recalled.
The Bush administration statement after the bill was passed, though criticized it, did not threaten a veto. The House will be under pressure to reconcile with the Senate bill and it looks like that some of these measures will remain unaltered.

The implications for the American and Chinese business:
1. The bill would burden the businesses. It would “create a playground for plaintiffs’ attorneys.” In deed, if the power is lowered to the state level, it could go out of hand easily and cause producers and importers alike huge amount of time and money to settle with all kinds of claims. In places where protectionism and populism sentiment is high, Chinese and other imported products would be subject to extreme scrutiny and put through lengthy and costly bureaucratic and legal processes.
2. The bill would create a database for circulating “frivolous complaints" filed by interest groups and the database would be used “to anonymously smear companies” by their competitors. Using that database, info of a local incident could spread throughout the country and develop into a national witch-hunt.
3. The bill would require laboratories that test certain children’s products for safety to be independent and privately owned. Frequent use of this provision may cause producers a lot to pay for the tests and certain corruption may occur when certain private lab is designated.
4. The bill would extend whistle-blower protections to employees who disclose safety violations. This could be easily used against Chinese firms in which unsatisfied employees could be picked up by interest groups and speak against their employer.

After all, the purpose of this bill is to safeguard American consumers and to a large extent, it would do well. But after careful examination of the details, you will find disturbing potentials for future trade conflict. The bill is somewhat overreacting than the House bill and is cost-inflating at least.