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November 18, 2002
Volume 80, Number 46
CENEAR 80 46 p. 15
ISSN 0009-2347


REGULATIONS

EU PLAN ASSAILED
Chemical makers from U.S., Europe cite costs, trade agreement concerns

CHERYL HOGUE

The European Union's planned regulation for registering, testing, and labeling chemicals could disrupt world markets and violate international trade pacts, warn chemical manufacturers from the U.S. and Europe.

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"The proposed EU system could move away from international regulatory convergence and create a complex, burdensome, and largely unworkable system that would fail to improve human health and the environment," claims a joint statement by the American Chemistry Council (ACC) and the European Chemical Industry Council (CEFIC). The trade groups issued the statement on Nov. 8 in Chicago at a meeting of the Transatlantic Business Dialogue. That group is an informal forum for businesses based on both sides of the Atlantic to develop EU-U.S. trade recommendations in conjunction with their respective governments.

Under the EU plan, explicit government approval--called authorization--would be needed before certain chemicals could be sold in EU countries. This requirement would apply to all products containing or made with compounds listed as carcinogens, mutagens, reproductive toxics, and persistent pollutants, regardless of whether the hazardous chemicals were intermediates totally consumed in the manufacturing process or present in the final product.

The chemical industry estimates that the proposed control strategy, called a white paper, if implemented, will cost manufacturers about $7 billion to register and test their products. The European Commission, the EU's administrative arm, issued the white paper nearly two years ago (C&EN, Feb. 26, 2001, page 34). The commission is drafting a formal legislative proposal to implement the plan.

ACC and CEFIC say the proposed policy would lead chemical producers to withdraw a quarter of their products from the EU market. This in turn would force higher costs on their commercial customers--including many small and medium-sized companies. Michael P. Walls, ACC senior counsel, says this could affect the electronics, health care, automotive, aerospace, and other sectors.

The EU plan also presents several potential trade barriers, Walls says. One is that World Trade Organization rules require its members' regulations to restrict trade as little as possible. Another is that an exporter of small amounts of a chemical might be forced to split the costs of testing with an EU manufacturer that makes large volumes of the substance, raising issues of fairness.

Walls also cites situations where U.S. chemical makers use a different production method for making a particular compound than do their EU competitors. If the U.S. production method triggers the need for authorization of imports of the substance but the EU-produced version does not, the EU regulation would be viewed as "a blatantly discriminatory approach" under trade rules, Walls says.



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