In today’s Wall Street Journal, US Ambassador to the European Union (yes, we have one of those), C. Boyden Gray, outlines the threat to business worldwide from the EU’s proposed chemical regulation directive, REACH:

The fundamental flaw of Reach — which stands for the Registration, Evaluation and Authorization of Chemicals — is that it is not carefully tailored to address possible harms, and its potentially enormous costs are not offset by enough clearly identifiable health benefits. Reach would require producers and importers of chemicals and products containing chemicals that are manufactured in or imported into the EU in quantities over one metric ton per year — approximately 30,000 substances — to register them with a new EU agency in Finland, and to provide extensive information on their properties, uses and handling.
While this might seem unobjectionable, some of Reach’s key provisions will apply to chemicals to which there is no human exposure — and thus no possibility of harm. At the same time, the proposal exempts certain highly toxic chemicals where there is serious human exposure and much known existing harm. The latter group includes chemicals such as gasoline and diesel fuels — which, without an exemption, would likely be blacklisted by Reach…
These factors explain why virtually every non-EU country with a chemicals industry has joined the U.S. in voicing serious concerns about Reach. This “coalition of the excluded” includes South Africa, which is worried that Reach will cripple the mining industry in some of the poorest parts of the developing world. At the other end of the spectrum are sophisticated high-tech producers in South Korea, India, Japan and Israel.
These countries have offered very specific suggestions: that the authorization process should be clearly risk-based; that the extension of Reach to chemicals that are embedded in manufactured goods with little risk of human exposure be strictly limited; that confidential trade secrets be protected where at all possible; and that the consultative process be more inclusive and transparent.
The EU response has not been encouraging on the whole, although some sympathetic national governments and members of the European Parliament have quietly tried to help. The EU’s “party line” is that the current proposal is “balanced” and that the EU’s trading partners have no choice but to comply. This is hardly the response one would expect from a major trading partner, particularly one that is striving for “better regulation.”

The EU is starting to impose regulations beyond its borders, regulations that will impose continental European systems on anywhere that wishes to trade with them. This is the thin end of a potentially huge wedge that, combined with the Doha issues, could end up in a global trade war, to nobody’s benefit.

My colleague Angela Logomasini has a comprehensive critique of REACH here.