There’s no question that the US congress is a bit upset about the increasing role of China in world trade and the every-growing trade surplus. With the exception of the toy industry, we’ve yet to see much direction action from congress although the topic has been heavily discussed.

Both US democratic presidential candidates have also recently made statements regarding trade, and like others have focused on “new standards” as the way to correct imbalances:

Clinton and Obama have basically identical positions on NAFTA. Both call for the agreement to be rewritten to include labor and environmental safeguards. Full Article

Meanwhile, Nick Clegg, leader of the Liberal Democrats in the House of Commons (UK) has been pushing for increased free trade on food imports - but only with new standards:

I know that the lowering of trade barriers on food imports worries many of you. It is hard to compete with low-cost imports that fail to match the EU standards you work so hard to meet. So the EU should press the WTO to allow countries to demand some basic animal welfare and environmental standards from imports. Full Article

Certainly one of the historical advantages to manufacturing in China is the lack of transparency. Many manufacturers have “show factories” which shown to buyers while their goods are made elsewhere under different conditions. Foreign companies with their own manufacturing facilities also enjoy a relative freedom from investigative journalists who have an extremely hard time in China.

The same lack of transparency has also frustrated the central government in their increasing drive to collect taxes and to enforce environmental standards.

If arguments for new and better enforced manufacturing standards develop into legislation in the US or EU we may see additional de-facto tarriffs to cover the costs of additional quality control and standards enforcement. Perhaps this will work to balance trade surplus, or perhaps manufacturers will jump to comply. If these standards are co-developed with the support and involvement of the central government, then we may see a great deal of change.