Environmental Engineering Reference
In-Depth Information
23
Does environmental policy a
ect trade?
The case of EU chemicals policy
Frank Ackerman
ff
Introduction
Do the environmental policies of developed countries function as barriers to trade? This
question has been extensively debated for years, often with a focus on developing-country
exporters in agriculture or other low-technology industries. This chapter addresses the
question from a di
ects of one of the most ambitious
European environmental initiatives of recent years: REACH, the new EU chemicals policy
(the name is an acronym for Registration, Evaluation, and Authorization of Chemicals).
Based on a series of research studies on the economic impacts of REACH,
1
I conclude
that:
ff
erent perspective, looking at the e
ff
1.
The costs of REACH, although measured in billions of euros, are very small com-
pared to the massive EU market for chemicals.
2.
The e
ects of REACH on many developing countries are concentrated in mining, a
sector dominated by multinational and other large corporations that can easily a
ff
ff
ord
to comply with European regulations.
3.
For US exporters, compliance with REACH will be entirely a
ordable, and will be
essential to avoid repetition of the losses that have resulted from ignoring foreign
standards in other cases.
ff
As a number of researchers have noted, environmental standards set by Europe and other
developed countries have the potential either to harm or to help developing countries
(Nadvi, 2003). Rich-country standards can function as barriers to poor-country exports,
thus impeding development (Copeland and Taylor, 2004). For example, food safety stan-
dards may turn out to play a protectionist role in practice (Henson and Loader, 2001). On
the other hand, standards set in export markets may serve as a spur to social and envi-
ronmental progress for developing-country exporters. European retailers have played a
crucial role in transmitting information and incentives to their overseas suppliers, as
shown in studies of the cut-
ower industry (Hughes, 2000), fruit production in Brazil (van
der Grijp et al., 2005), and the leather industry in India, Pakistan and elsewhere (Jenkins
et al., 2002; Khan et al., 2002; Tewari and Pillari, 2005).
Most of the case studies in the literature are understandably focused on agricultural
exporters, or on industries, such as leather, which process local agricultural products; such
industries play a large part in the economies of developing countries. In these sectors, it
is common to
fl
nd small-scale producers with limited information about export markets
and foreign standards, and limited resources for responding to a changing international
context. Questions of asymmetric information become crucial for such producers; the
need for technical, and perhaps
fi
fi
nancial, assistance is clear.
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