Environmental Engineering Reference
In-Depth Information
US exports: national pride or market access?
At the opposite end of the economic spectrum, REACH poses new, but manageable,
challenges for US exporters as well. On balance, the EU has a trade surplus in chemicals
with the USA (and with Japan; Europe is clearly the world leader in the chemicals indus-
try). However, there are substantial
ows of chemicals in both directions. In a recent
study, we estimated that US chemicals exports to the EU that are subject to REACH
amount to $14 billion per year, and are directly and indirectly responsible for 54 000 US
jobs (Ackerman et al., 2007). There is no reason to expect that REACH compliance costs
for US exporters will be any greater than for European producers. Applying the same 0.1
percent estimate for compliance costs, as discussed above, suggests that US exporters
might face REACH compliance costs of $14 million per year, for 11 years, in order to
maintain $14 billion of annual sales.
This should be, as the saying goes, a no-brainer: spend $1 a year for 11 years, or lose
access to markets worth $1000 per year? No advanced quantitative skills are required to
come up with the answer that looks best on the bottom line. In fact, spending $14 million
a year to preserve 54 000 jobs compares favorably with many state job creation programs.
Yet US industry and the Bush Administration have devoted considerable energy to
arguing against REACH, continuing well past the point by which European industry had
accepted the inevitability of some form of REACH.
In 2002, then-Secretary of State Colin Powell cabled US diplomatic posts with instruc-
tions to 'raise the EU chemicals policy with relevant government o
fl
cials' and to object
to REACH as 'costly, burdensome, and complex' (for documentation of this account, see
Ackerman et al., 2007). The Assistant US Trade Representative for Europe and the
Mediterranean invited American chemical companies to develop 'themes' for the US gov-
ernment to cite in its communications with EU o
cials regarding REACH. The Bush
Administration
led formal comments with the European Commission criticizing many
features of REACH, and circulated a chemical industry estimate of $8.8 billion in lost
exports - an estimate based on the false assumption that all US computer sales to the EU
would be cut o
fi
nal, the US
Diplomatic Mission to the EU organized a joint statement of the Missions of Australia,
Brazil, Chile, India, Israel, Japan, South Korea, Malaysia, Mexico, Singapore, South
Africa and Thailand, asking the European Parliament to reconsider the implementation
of REACH. The joint statement argued that REACH procedures are opaque, that
REACH could disrupt international trade, and that it will harm developing countries in
particular.
Following such persistent opposition, is there any risk that the USA might refuse to
comply with REACH, now that it has been adopted? To do so would be foolish: like it or
not, those are now the rules for selling chemicals in Europe. National pride is a poor
substitute for access to export markets; past experience has shown that even the USA
can quickly be shut out of established export markets by failing to comply with foreign
standards.
One cautionary tale is provided by genetically modi
ff
by REACH. As late as 2006, when the decision was all but
fi
fi
ed corn. Bt corn, a variety of
genetically modi
rst regulatory approvals in 1992
and burst onto the market in the mid-1990s. From 1.4 percent of US planted area in 1996,
Bt corn rose rapidly to 32 percent in 2004 (Ackerman et al., 2003; Nadal and Wise, 2004).
5
US growers, distributors and exporters are not able to reliably separate conventional from
fi
ed corn developed in the 1980s, won its
fi
