How Europe employs disguised regulatory protectionism to weaken American free enterprise

International Journal of Economic Development, April-July, 2005 by Lawrence A. Kogan

B. Toxic and High Volume Chemicals

Another good example is the proposed EU regulation on high volume chemicals known as the Registration, Evaluation and Authorization of Chemicals ('REACH'). REACH is a complex, three-level, volume-based system that mandates the registration of over 30,000 existing chemicals presumed to be hazardous. Also requiring evaluation of substances which 'give rise to a particular concern' and authorization for substances deemed to be 'of high concern', REACH does not consider, via a scientific risk assessment, the potential for actual human or environmental exposure (risk of harm) until after all industry testing has been completed. (31) REACH would impose on U.S. exporters a broad legal duty of care, satisfaction of which requires compliance with an extensive, rigorous, costly and largely unnecessary pre-market authorization and information sharing process that requires disclosure of proprietary company data without adequate protection of intellectual property. (32) Although REACH was drafted as a regional regime, the EU has all but admitted that it is intended to serve as a global template for the management of chemicals, and to impact virtually all product sectors at all levels of the global products supply chains. (33)

C. Cosmetics

REACH dovetails with other related EU regulations like the Amended EU Cosmetics Directive. This directive bans the use of phthalates (known to be carcinogenic to mice) in cosmetic products even though scientific tests (risk assessments) have thus far found "no evidence to suggest that consumer exposure to phthalates in cosmetics and personal care products poses a human health risk." (34) In addition, it bans the animal testing of most cosmetics prior to consumer use, even though failure to conduct such tests may expose humans to greater health risks. (35) If strictly applied, the ban would not only run counter to U.S. food and drug law mandating the animal testing of cosmetic products classified as 'over-the-counter drugs', but also would effectively require the reformulation by industry of all current cosmetics products. (36) This directive, furthermore, mandates full ingredient identification, which effectively requires disclosure of proprietary company data without adequate intellectual property protections. And it requires the labeling of all cosmetic substances which, as European industry has already found, is a very costly and unworkable requirement considering that fragrance compositions used in cosmetics typically contain numerous ingredients that can themselves be comprised of hundreds of individual substances. (37)

D. Biocides

The REACH regulation is also complimented by the EU Biocidal Products Directive and accompanying regulations, which apply a similar presumption of hazard to broad classes of chemicals and/or biological agents (e.g., disinfectants, chemical preservatives, non-agricultural pesticides, etc.) with similar intrinsic properties. The EU biocides regime covers twenty-three different product types overall. (38) These rules require companies to obtain formal authorization of all existing 'active' substances (39) and preparations in which they are contained before they can market them. To obtain formal authorization, biocide producers and formulators must first prepare and submit very detailed active substance dossiers indicating that they have assessed the risk of their products in advance. Such costly and onerous burdens are imposed upon industry before any government scientific risk assessment identifying a particular risk of exposure or harm has been performed, and even though the authorization process itself could eventually take up to ten years to complete. (40) And, once companies have complied, they are not even assured that the risk assessment data they provide will be honored by regulators who are more concerned with hypothetical hazards than with probable risk exposure scenarios. What is most disturbing, however, is that EU regulators have gone so far as to dictate how industry should formulate its products, even where it has positively satisfied the relevant regulatory safety requirements. (41) American companies should be very concerned about these rules considering how unworkable European companies have found them to be. (42)