• The Wall Street Journal, Wednesday, May 14, 2008 9:16 AM

Wal-Mart Stores has set tough new limits, effective this fall, on the amount of lead and other metals and chemicals allowed in children's products. The requirements go far beyond existing government regulations, and could become the industry standard.

The initiative also encourages suppliers to mark children's products with "traceability information," including the factory in which the goods were made. About 80% of the toys sold in the U.S.--including those marketed by U.S.-based toy makers--are manufactured in China.

Melissa O'Brien, a Wal-Mart spokeswoman, says the new standards are part of an effort to restore consumer confidence. Industry-wide, toy sales fell 2% in 2007 to $22.1 billion, with toys for infants, toddlers and preschoolers--which accounted for most of last year's recalls--down 5%, according to NPD Group. Another possible motive for the retailer's new policy: reducing legal liability.

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