Image: Wooden train st
Marcio Jose Sanchez  /  AP
Ava Mar, 8, plays with a wooden train set at the Play Store in Palo Alto, Calif.
updated 12/24/2008 1:43:08 PM ET 2008-12-24T18:43:08

Worries over lead paint in toys made the holidays a little brighter for handcrafted toy makers last year, but now the government's response to the scare has some workshops fearful that this Christmas might be their last.

Without changes to strict new safety rules, they say, mom-and-pop toy makers and retailers could be forced to conduct testing and labeling they can't afford, even if they use materials as benign as unfinished wood, organic cotton and beeswax.

"It's ironic that the companies who never violated the public trust, who have already operated with integrity, are the ones being threatened," said Julia Chen, owner of The Playstore in Palo Alto, California, which specializes in wooden and organic playthings.

In a memo released Wednesday, Consumer Product Safety Commission staffers recommended that the agency exempt some natural materials from the lead testing requirements.

Lead paint spurred the recall of 45 million toys last year, mostly made in China for larger manufacturers. Parents flocked to stores like The Playstore in the recall's aftermath searching for safer alternatives.

Lawmakers also responded. In August, President George W. Bush imposed the world's strictest lead ban in products for children 12 or younger by signing the Consumer Product Safety Improvement Act.

Small toy makers strongly back the restrictions in the bill, which they say reflect voluntary standards they have long observed to keep harmful substances out of toys. But they never thought their products would also be considered a threat.

Under the law, all children's products must be tested for lead and other harmful substances. Toy makers are required to pay a third-party lab for the testing and to put tracking labels on all toys to show when and where they were made.

Those requirements make sense for a multinational toy manufacturer churning out thousands of plastic toys on an overseas assembly line, said Dan Marshall, co-owner of Peapods Natural Toys and Baby Care in St. Paul, Minnesota.

But a business that makes, for example, a few hundred handcrafted wooden baby rattles each year cannot afford to pay up to $4,000 per product for testing, a price some toy makers have been quoted, he said.

Marshall and nearly 100 other toy stores and makers have formed the Handmade Toy Alliance to ask Congress and the federal agency that enforces the law to exempt small toy companies or those that make toys entirely within the U.S. from testing and labeling rules.

Failing that, they want the Consumer Product Safety Commission to preemptively declare unfinished wood, wool and cotton and food-grade wood finishes such as beeswax, mineral oil and walnut oil to be lead-free.

U.S. Rep. Bobby Rush, lead sponsor of the legislation, says toy makers should not worry. Rush points out that the law already exempts products and materials that do not threaten public safety or health.

"This exemption should be sufficient to affect most companies," Rush said in an e-mail to The Associated Press.

Determining what materials fall under that exemption falls to the safety commission, however, which has yet to issue specific guidelines. With a Feb. 10 deadline for complying with the law, small toy makers say they have no choice but to act as if its rules apply to them or risk facing fines of $100,000 per violation.

Staff toxicologists at the product safety commission told agency commissioners in a memo released Wednesday that some unfinished natural materials should be considered lead-free. The materials include wood and fibers such as cotton, silk, wool and linen.

The safety commission still must vote on the recommendations.

"The agency is diligently working on providing rules that would define some exclusions and some exemptions," said Julie Vallese, a spokeswoman for the product safety commission.

Toy safety activists who helped push the legislation through Congress say they are sympathetic to small toy makers' anxieties.

Charles Margulis of the anti-lead Center for Environmental Health in Oakland said exemptions based on natural materials would be "sensible." But "Made in the USA" is not enough to ensure a toy is not toxic, according to Margulis. "Materials from the U.S. could be lead-contaminated as well," he said.

One European toy maker has already announced it will stop its exports to the U.S. because of the law's costs and uncertainties. Selecta Spielzeug, a German company, said earlier this month that it will stop shipping its wooden push toys, games and other products to 1,200 U.S. stores after Dec. 31.

Mike Lee, co-owner of Sarah's Silks in Forestville, said fewer of his company's costumes, hats and capes for children will likely appear on U.S. store shelves in coming months. If testing costs are not curtailed for his more than 100 products, he said, he may have to reduce his nine-employee staff.

"We're not that big we can plunk out $20,000 or $30,000 every time we do this," Lee said. "I'd rather invest that much more of that money in people."

Chen, the owner of The Playstore, says pulling toys from shelves means fewer choices for parents who want something different for their children than what they can find at big-box stores. If no exemptions are made, Chen said, the number of brands she sells could drop from more than 300 to about 10.

"Our whole mix is going to have to change," Chen said. "This is truly actually threatening our access to safe toys."

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