How Donald Trump's EPA Can Reinvigorate U.S. Manufacturing
As President-elect Trump begins planning for ways his administration will reinvigorate American manufacturing, he should consider an unorthodox tool: the Environmental Protection Agency.
EPA rules can play a critical role in strengthening American competitiveness by ensuring a level regulatory playing field and fair competition with foreign manufacturers who want access to the U.S. market. A new EPA regulation serves as a good example.
On Monday, EPA announced a new regulation that represents a remarkable effort by diverse environmental, labor union and industry stakeholders and a bipartisan group in Congress. The new rule implements a law which established nationally the world's most stringent standard for formaldehyde emissions for composite wood. The rule covers particleboard, medium density fiberboard (MDF), hardwood plywood and all products made with these materials.
This rule impacts a vast set of stakeholders because composite wood actually touches the lives of millions of Americans. Composite wood panels are used in hundreds of applications, including home and office furniture, residential and commercial cabinetry, store fixtures, millwork and molding, electronics, toys.
One other use - laminate flooring - gained significant attention in 2015 due to a 60 Minutes investigation of the largest retailer of hardwood flooring in North America, Lumber Liquidators. The report found that the retail giant was selling laminate flooring made in China that contained levels of formaldehyde that exceeded the standards set by the California Air Resources Board - the most rigorous in the U.S. Many of the samples 60 Minutes checked in China were marked erroneously as being compliant with California's standards.
It's important to note that the formaldehyde concerns only involved Chinese-made laminate flooring. The 60 Minutes investigation found that all U.S.-sourced laminate flooring passed CBS' independent testing. That wasn't a surprise or an accident.
In 2008, the Composite Panel Association (CPA), which represents North American manufacturers of composite wood products used in the production of laminate flooring, worked closely with the California Air Resources Board (CARB) to establish a regulation with the world's most stringent standards for formaldehyde emissions. The industry went even further and voluntarily agreed to meet California's highest standards for all production throughout the nation, regardless of destination.
Yet as the 60 Minutes investigation showed, not all importers have made the same universal commitment. That disparity raised concerns that consumers in other states might not have the same benefits as those in California.
It also exposed a competitive disadvantage for North American manufacturers, who have used major investments, technology upgrades and third-party certification to ensure compliance with these high standards. Importers who have skirted the standards have gained an unfair advantage by not incurring these costs.
An initiative to fix this problem had already begun six years ago when a bipartisan group of members of Congress agreed to work with CPA, environmental groups, labor and other industry stakeholders to better protect all consumers and balance the playing field for North American manufacturers.
In 2010, Senators Amy Klobuchar (D-MN) and Mike Crapo (R-ID) and Representatives Doris Matsui (D-CA) and Vern Ehlers (R-MI) spearheaded the introduction and passage of the Formaldehyde Standards for Composite Wood Products Act. It established the first comprehensive, mandatory national standards for formaldehyde emissions from composite wood products in U.S. history.
The Act adopted California's stringent emission limits and required EPA to issue implementing regulations setting strong quality assurance requirements for manufacturers and establishing a transparent chain of custody for materials. It also required a stringent third party testing regime to certify products and give consumers stronger confidence in what they were buying. It leveled the playing field for U.S. companies with their foreign competitors while ensuring the highest safeguards for consumers.
With EPA's new regulation published, the process is now complete. However, as helpful as a law and a regulation are, they won't solve the problem on their own. Laws and rules only work when they are enforced.
EPA must now make a concerted effort to allocate sufficient resources to ensure that imported products comply with these new high standards. Only through aggressive enforcement will we see better protections for consumers and a truly level playing field for manufacturers in North America and around the world.
Under the right leadership, EPA can help ensure a level playing field for American companies and foreign manufacturers who want access to the U.S. market. This can be a powerful tool to help reinvigorate American manufacturing. By beginning his administration with proper enforcement of this new formaldehyde rule, President-elect Trump can signal his intention to use it that way.