Environmental Engineering Reference
In-Depth Information
Wheat growers, in contrast, understood the importance of foreign markets and rejected
a dubious innovation that would have jeopardized their export sales. As the USA faces
the dilemma of a huge and mounting trade de
cit, the conclusion must be that the
wheat growers got it right, making the choices that maintained market access, while
the corn and beef industries (and the Department of Agriculture) got it wrong, stub-
bornly losing foreign buyers who wanted a product that can meet higher and di
fi
ff
erent
standards.
Conclusion
As the USA has unfortunately demonstrated, environmental standards do a
ect trade, at
least when exporters ignore them. Even the world's leading economies can lose access to
foreign markets, essentially overnight, by failing to respond to their customers' environ-
mental preferences and regulations. On the other hand, for those who set out to comply
with other countries' standards, the costs of a regulation as ambitious as REACH amount
to only a trivial percentage of sales. The total cost of a few billion euros for REACH com-
pliance, spread across one of the world's largest markets over a period of 11 years, turns
out to be an insigni
ff
fi
cant cost burden. US exporters can easily a
ff
ord their share of these
costs, as the price of maintaining market access.
Perhaps more surprising is the near-absence of any burden on developing countries.
There are almost no examples, in the trade
ected by REACH, of struggling,
small-scale developing country businesses, the emerging enterprises for which northern
standards are a potential obstacle to trade. While that paradigm may be of importance in
agriculture and other low-technology, less capital-intensive industries, it has little role in
mining and chemicals. The one exception that falls within the scope of this analysis, the
essential-oils industry, is so small that the EU can obviously a
fl
ows a
ff
ff
ord any necessary techni-
cal and
nancial assistance to the producers.
Developing-country economies include small local enterprises, to be sure - but they
also include subsidiaries of multinational corporations, which often account for large
shares of the country's exports. Helping local enterprises to grow and prosper is a
worthy goal, but should not spill over into special breaks for multinational mining com-
panies when they mine the same commodities in Africa rather than Australia or North
America. The producers of ACP's REACH exports can a
fi
ord to comply with REACH,
just as well as European companies; in a number of important cases, they
are
European
companies.
ff
Notes
1.
The studies address: the costs of REACH, for the Nordic Council of Ministers (Ackerman and Massey,
2004); the e
ects of REACH on developing countries, for the European Parliament (Ackerman et al., 2006),
also described in (Ackerman et al., 2008); and the e
ff
ects of REACH on the US (Ackerman et al., 2007). My
forthcoming topic on the economics of toxic chemicals and precaution (Ackerman, 2008) includes chapters
describing all three studies.
ff
2.
On Europe's longstanding economic and political relationship the ACP states see Robins (1998), Holland
(2002) and Adelle et al. (2006).
3.
This and many of our data are 2002-04 averages, and are documented in Ackerman et al. (2006).
4.
This is a term we introduced; it is shorthand for 'exports to the EU that would be subject to REACH.'
5.
All varieties of genetically modi
fi
ed corn together amounted to 45 percent of the US corn plantings in 2004
(Nadal and Wise, 2004).
6.
See 'US won't let company test all its cattle for mad cow',
New York Times
, 10 April 2004.
