The European Parliament voted on December 13 to approve legislation calling for the Registration, Evaluation and Authorization of Chemicals, known as REACH. Two American trade organizations immediately issued statements calling the legislation unworkable, claiming it will have a negative impact on global industry.
Representatives of the American Chemistry Council in Arlington, Va. say that the European Parliament approved REACH “in a form that will unnecessarily stifle trade and innovation.” Leaders from the Institute for Trade, Standards and Sustainable Development (ITSSD) in Princeton, N.J. say that the adoption of REACH “is certain to have a severely negative impact on global industry and will seriously undermine confidence in the international trading system.” ITSSD’s statement goes on to ask, “Do Europe’s governing institutions honestly believe that REACH will escape a vigorous challenge at the World Trade Organization (WTO)?”
REACH legislation is designed to limit the use of hazardous chemicals in most commercial and industrial products. Some American companies see it as a tool to enhance European competitiveness by imposing costly regulations and standards on countries outside Europe. Others claim that REACH’s restrictions on hazardous chemicals are not based on conclusive, objective science.
ACC’s president and CEO, Jack N. Gerard issued a statement shortly after the EU Parliament approved REACH. “Today’s vote by the European Parliament has unfortunately failed to produce workable chemical legislation,” says Gerard. “The compromise package approved by the Parliament has not addressed many of the key concerns repeatedly expressed by industry and major EU trading partners.”
Gerard notes that he was hoping for a more focused and flexible approach to regulation and a risk-based approach to authorization that would have brought the different economies and regulatory systems closer together. His comments echo other industry leaders who have also complained about the EU’s RoHS legislation, claiming that it’s not fair for one region to effectively dictate regulations that have to be honored across the globe.
In a global economy, companies cannot produce goods specifically designed to accommodate the regulations of one region. If a region such as Europe passes environmental legislation, that law forces manufacturers to change the composition of all products produced for the global market.
As for REACH, ITSSD CEO Lawrence Kogan believes the European Parliament has violated a ruling the European Communities (EC) has already agreed to. “The REACH regulation is premised on the extra-territorial, non-scientific, Precautionary Principle, which a WTO Panel recently disregarded in the EU Biotech Products dispute,” says Kogan. “The EC even subsequently agreed to ‘accept’ the finality of that ruling. Yet, despite this world body’s considered opinion, or perhaps, in spite of it, the European Communities apparently felt confident enough or compelled to brazenly move REACH forward.”
At this point, the ITSSD calls upon the U.S. Trade Representative, U.S. industry and developing country governments and industries to come together to plan and launch a full-scale WTO attack against the European Communities “blatantly illegal REACH regulation.”