DEVELOPING COUNTRIES SAY REACH COULD HAVE "GRAVE CONSEQUENCES"

Thirteen of the EU's leading trade partners, including several developing countries, issued a statement on 8 June urging Brussels to modify the proposed Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) legislation to reduce its "potentially disruptive impact on international trade" and "grave consequences on developing economies". The joint press statement from the missions to the EU of India, Brazil, Mexico, Singapore, South Africa, Thailand, Chile, Israel, Korea, Malaysia, Australia, Japan and the US came at the end of a meeting hosted by the American Chamber of Commerce to the EU (AmCham-EU) in Brussels, Belgium on the impact of the draft chemicals regulation on international trade flows. The legislation has gone through a first reading in the European Parliament and a vote in the Council of Ministers (see Bridges Trade BioRes, 25 November 2005).

Risk, notification costs and substitution key concerns

The statement calls on the EU to use the opportunity provided by the second reading in Parliament, scheduled for October 2006, to make key changes to reflect their concerns regarding the workability of the regulation, its effects on international trade, and the opacity of the regulatory process. In particular, the countries said they wanted a "more risk-based authorisation process" to decide what products would be subject to the registration and regulation requirements. They stressed the importance of only including chemicals on the basis of a risk assessment that demonstrated clear health or environmental risks, and questioned the environmental value of including chemicals which have been processed to the point at which they have no more risky characteristics, or which are covered by other legislation. They said that some parts of the draft legislation, such as the inclusion of "everyday bulk commodities", high registration fees and demands on technological and human resource capacity could be particularly burdensome for small and medium-sized enterprises in developing countries.

The countries also took aim against the substitution principle in the draft legislation, under which companies that wanted to use a chemical that had been deemed hazardous by the REACH approval and registration process would be required to use another safer chemical, if available. They argued that mandatory substitution would cause "unnecessary market disruptions without clear environmental benefits". Instead, they suggested that the EU harmonise its rules with existing international regulatory efforts, using data from the Organisation for Economic Co-operation and Development (OECD) and other relevant organisations.

No explicit mention of WTO compatibility, but allusions made

Although the countries did not make an explicit reference to the WTO-compatibility of REACH, the frequent references to "effects on international trade", "unnecessary market disruptions" and "unclear environmental benefits" was interpreted by many analysts as a reference to the possibility that aspects of REACH could be regarded as constituting an unnecessary obstacle to trade. The US in April of this year suggested that the regulation could be challenged through the WTO's dispute settlement system under Article 2.2 of the WTO Agreement on Technical Barriers to Trade (TBT), which specifies that WTO Members shall not adopt or apply technical measures that are unnecessary barriers to trade insofar as they are more trade-restrictive than necessary..

The US is expected to raise its objections to REACH at an EU-US summit to be held on 21 June in Vienna.

EU, civil society lash back

REACH was originally designed to protect consumers and the environment against the adverse effects of chemicals found in products like paint, detergents, cars and computers. Environmental group WWF said that the countries making the statement had failed to take account of changes that had been made to the bill after its first reading in the EU parliament -- including revisions to the text to make sure the rule-making was based on that from relevant international regulatory fora, to allow for exemptions, and to prioritise chemicals on the basis of risks. Justin Wilkes, a chemical safety campaigner at WWF, said it was "part of a continuing US effort to weaken REACH to the benefit of its chemicals industry". Instead, WWF argued, REACH could help developing countries to create domestic systems for sound chemicals management. A recent study drafted for the European Parliament's Development Committee estimates the costs to the chemical companies operating in African, Caribbean and Pacific countries to be just Euro 50 million over 11 years.

In response to questioning regarding the statement and the WTO implications of the legislation, the EU told reporters on 9 June that it had consulted with the WTO and its own legal service about compliance with the TBT Agreement. "We do not see how [REACH] could contravene WTO rules", said environment spokesperson Barbara Helfferich.

Additional resources

The joint press statement is available at http://useu.usmission.gov/Dossiers/Chemicals/Jun0806_REACH_Statement.asp

ICTSD reporting; "US mounts coalition to defeat EU chemical safety reform (REACH)," EURACTIV, 9 June 2006; "US, others pressure EU to re-think chemicals bill," REUTERS, 9 June 2006; "EU chemicals bill under fire from US-led coalition," EU OBSERVER, 9 June 2006; "U.S. Rallies 12 Nations to Pressure EU To Ease Burden of REACH Chemical Reform," WTO REPORTER, 12 June 2006.