What are the benefits?
For consumers keen to compare products, for example mothers of younger children, teens, etc., the portal will be an easy way, while shopping, to check on any issues concerning the safety of a product imported from other parts of the world or manufactured domestically. It also assists consumers when purchasing online and across borders and it will become even more useful when a mobile “app” becomes available.
For businesses, notably for product manufacturers, the portal will provide information that could enable them to move more swiftly to address a safety problem, thereby reducing the number of incidents causing injury, and the costs associated with them. This could lower the safety risks, which could, in turn, lower insurance costs for producers. Small businesses/importers may find it helpful when dealing with suppliers from overseas. Retailers could also take swifter actions to remove unsafe products from their shop shelves and to notify national authorities about health and safety concerns.
For governments, the portal brings benefits by enhancing information sharing across borders in a timely and multilingual fashion. It will help to enhance enforcement actions as well as market transparency. The portal may become also important for developing economies which don’t have electronic systems on data recalls. They will be able to use the OECD system to develop and customise their own portals, at low cost.
Finally, the portal has the potential to greatly raise awareness of safety concerns worldwide, in a cost-effective manner. A similar OECD portal on chemicals is saving governments and industry an estimated EUR 150 million annually. It also uses a common product taxonomy. In the United States, use of the taxonomy could reduce the volume of imported toy products subject to examination by 75%, resulting in savings of USD 16.8 million for toy importers and USD 775 000 in cost savings for the government over five years.
Why is the GlobalRecalls portal important?
Over the past two decades the issue of product safety has gained a global dimension as a consequence of increased trade across borders and more sophisticated and globalised supply chains and product designs. In 1990, for example, the G7 economies accounted for two-thirds of world manufacturing value added but they now account for less than half. By 2009, China had almost reached the level of the United States in manufacturing production, and the role of Brazil and India among world manufacturers is now the same as Korea’s. At the same time, world merchandise exports have shifted from developed to developing and emerging economies over the last 60 years. For instance, exports from the United States have decreased from 28.1 per cent of world trade in 1948 to 13.1 per cent in 2009. On the other hand, the Asian continent became a major exporter in the last decade. In 2009, it accounted for 29.4 per cent of world merchandise exports, which is double the level in 1948.
At the same time, the number of recalled products has increased. For instance, in South Korea, the number of recalls increased by about 25% in 2012, when compared to 2011. An increase by 8.5% in the number of recalls was noted in Australia in the current fiscal year, when compared to a year earlier. From 1992 to 2006, toy recalls increased at a faster rate than the increase in imports from foreign countries in the United States. This trend was also observed in the European Union, which shared 1,803 notifications via its RAPEX information-sharing system in 2011, when compared to 139 notifications in 2003.
Moreover, consumers’ purchasing behaviour has changed. Consumers tend to shop online more frequently. In the OECD area, the share of consumer purchasing products via e commerce increased from about 25% of individuals in 2007 to 32% in 2011. In other countries, like China and Brazil, growth was even higher. Brazil’s online sales increased by 26% between 2011 and 2010, while China achieved a 500% growth in 2011, when compared to 2008. Shoppers not only order goods and services from domestic businesses and consumers but also reach out to offers in other countries. For instance, in the European Union (EU), almost a third of consumers made at least one purchase in another EU country in 2011, which represents a 5%-point growth when compared to 2006.
In this changing market landscape, national authorities, businesses and governments have to respond more swiftly to address issues. The GlobalRecalls portal provides an important source of information for taking more timely and effective actions to protect consumers at every step of the global supply chain, from parts suppliers to assembly plants, to consumers.
Facts on product safety
• The cost of product-related injury, death and property damage in the United States exceeds USD 1 trillion per year.
• In South Korea, the number of recalls increased by about 80% in 2014, when compared to 2013. The increase is mainly due to the surge in voluntary recalls by manufacturers and distributors.
• In 2015, 2072 notifications on products posing a risk to consumers' health and safety were circulated through the European Rapid Alert System for dangerous products. The most frequently notified consumer products were toys and clothing, and the two most common types of risks were chemical risk and injuries.
• An increase by 8.5% in the number of recalls was noted in Australia in fiscal year 2012, when compared to a year earlier.
• On average, one product recall is issued per week in the Netherlands.
• From 1992 to 2006, toy recalls increased at a faster rate than the increase in imports from foreign countries in the United States.
• 25% of the products targeted for controls by French Customs in 2015 were non-compliant.
• Canada has seen an average 270 consumer product safety recalls per year since 2009. Of these, the number of joint recalls with the United States has increased significantly in recent years, from 3% in 2009 to 39% in 2015.
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