U.S. BUSINESSES, CONSUMERS TO FEEL EFFECTS OF MASSIVE EUROPEAN CHEMICAL REGULATIONS
December 14, 2006
The European Parliament passed a bill yesterday to vastly expand the European Union's (EU) regulation of chemicals. "The new program will have negative economic impacts around the world and likely serve as a trade barrier to U.S. businesses," says Angela Logomasini, director of risk and environmental policy at the Competitive Enterprise Institute.
- The program, known as REACH -- for the Registration, Evaluation and Authorization of Chemicals -- would require companies to submit data to register more than 30,000 chemicals with EU regulators, the vast majority of which are already on the market.
- Some chemicals would also have to undergo additional study and regulatory processes, which can lead to bans and other restrictions.
- REACH regulations will be based on the precautionary principle -- which demands that manufacturers prove their products are "safe" before regulators allow them into commerce.
Since nothing is 100 percent safe, the standard grants regulators arbitrary power to regulate politically unpopular products, explains Logomasini. REACH represents the most significant codification of the precautionary principle ever and it is likely to encourage other policymakers to offer similar proposals. For example, U.S. Senator Frank Lautenberg (D-N.J.) is expected to offer a bill modeled after REACH during the 110th Congress.
Businesses have largely supported the REACH concept, but apparently the final version is more onerous than expected and some firms fear costs will be too high, notes Logomasini. REACH will cost Europe and its trade partners billions of dollars and not have any benefit whatsoever. It will reduce innovation and limit access to EU markets.
Source: "U.S. Businesses, Consumers to Feel Effects of Massive European Chemical Regulations; European Parliament Passes Onerous Chemicals Policy," Competitive Enterprise Institute, December 13, 2006.
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