Europe's New Chemicals Policy Hits Pacific Rim Resistance

BRUSSELS, Belgium, March 24, 2004 (ENS) - Key trading partners of the European Union have expressed "serious concern" over possible trade restrictions that might be slapped on Europe's draft chemicals policy. Called REACH, for Registration, Evaluation and Authorization of Chemicals, the proposal has drawn objections from industry and now from Pacific Rim countries. Environmentalists say the draft policy needs to be strengthened, not weakened.

Countries including Australia, Canada, China, Japan, Indonesia, Korea, Malaysia, Mexico, and the United States are behind the statement, sent earlier this month to the European Commission.

Drafted by regional organization Asia Pacific Economic Cooperation (APEC), the statement describes REACH as "overly expansive, burdensome and costly." Its greatest negative impact would be felt by developing economies and small and medium enterprises, APEC cautions.

"It has the potential to disrupt international chemical markets, burden downstream manufacturers, adversely impact trade, inhibit innovation, limit global competitiveness, and significantly increase costs," the APEC countries warn in their letter.

Paint, plastics, and chrome go into a British child's tricycle. Some of these substances or the chemicals used to process them may fall under REACH regulations. (Photo courtesy FreeFoto)

REACH is a system for regulating industrial chemicals, based on the precautionary principle. The Commission's goal is to reverse the escalating incidence of avoidable cancers, a wide range of other industrial diseases, and environmental contamination.

The REACH regulations are based on a set of categories. About 1,400 chemicals classed as being of very high concern - those toxic to humans, or that can become widespread in the environment, and which are persistent and bioaccumulative, especially persistent organic pollutants - would be authorized subject to specific conditions and strict deadlines.

Other chemicals produced in high volumes would be subject to other restrictions. Many of these chemicals are ingredients or contaminants in pesticides, and in consumer products, including food, cosmetics and household products.

The principles of REACH have received strong support from European and U.S. cancer prevention and public health scientists, and physicians.

But the APEC countries remain concerned about economic and trade impacts of the REACH regulations despite last minute modifications made by the European Commission before it officially proposed the legislation last October.

The changes were aimed at reducing the complexity and cost of implementation of the new regulations. Within Europe, the changes appear to have successfully won over the German government, which said in December that REACH would not damage the German chemicals industry, the largest in Europe, accounting for 26 percent of EU chemicals production in 2000.

But much of the EU business community remains skeptical. On March 8, the employers' organization UNICE again urged the European Commission to rethink its direction on implementing the Reach chemicals policy to avoid hindering European industrial competitiveness. The issue is one of four key priorities in a new "competitiveness action plan."

The EU chemicals lobby CEFIC warned on Friday that the sector's competitiveness is at risk, partly because of the potential future costs of REACH.

The competitiveness of the chemical industry under the REACH system is also a primary concern of the APEC countries. They worry that small and medium enterprises in the Asia-Pacific region and those economies that depend on commodity exports for their economic growth would be "severely affected," even under the revised proposal.

Smaller foreign producers, including specialty chemical suppliers and downstream suppliers, do not have the capacity for the data generation required under REACH.

As a result REACH may create "an inherent bias in favor of domestic EU suppliers," because European importers may decline to supplies imported from the APEC countries, not only chemical substances but also articles containing chemical substances.

The APEC countries noted in their letter that they share "Europe's goals to protect health, safety and the environment," but, they say, "the rules being imposed by the European Commission go beyond what is technically required to meet these ends."

They cite the World Trade Organization Agreement on Technical Barriers to Trade which obligates members not to impose any system that is more trade restrictive than necessary.

"We see possible trade restrictions arising from the registration, authorization and evaluation proposals that could have a severe impact on our domestic economies," the APEC countries stated in their letter.

The United States is a key player in APEC, and U.S. business and government sources suggest that the Bush administration is likely to take an even tougher line over REACH than the regional grouping. The United States expressed its concerns during last year's EU consulation on the draft REACH plan. It is preparing to issue a new statement by June 1.

To stimulate public understanding of the REACH proposals, on May 7 the United Nations Educational, Scientific and Cultural Organization (UNESCO) is hosting a colloquium in Paris that will provide an opportunity for scientists from Europe and the United States to present evidence on the role of environmental pollutants as causes of cancer and other diseases.

{ENDS Environment Daily contributed to this report.}