It is not about the Constitution. It is not exactly a "complot". But there certainly was some pressure exerted on behalf of the US on several European governments. The subject is REACH, a European Plan devised to ask chemical companies (instead of governments) to prove that their products are not toxic before putting them on the market. At stake are jobs, environment policies and US-EU relations.
The second story shows that it is a subject of strategic importance and that the US might have to adopt the European position in order not to duplicate costly testing procedure.
The New York Times - White House Undermined Chemical Tests, Report Says
Stratfor.com - Chemical Industry: Grasping the Implications of REACH
White House Undermined Chemical Tests, Report Says
By ELIZABETH BECKER
Published: April 2, 2004
ASHINGTON, April 1 - A report released by a House committee on Thursday describes how the Bush administration worked with the United States chemical industry to undermine a European plan that would require all manufacturers to test industrial chemicals for their effect on public health before they were sold in Europe.
The administration had said publicly that the proposal last year would threaten the $20 billion in chemicals that the United States exports to Europe each year because the cost of testing would be prohibitive. Five years in the making, the proposal, which was revised and is still under consideration, would shift the burden to prove the safety of chemicals onto manufacturers instead of governments.
Behind the scenes, the administration was working with the chemical industry to devise a plan to undermine the proposal, according to e-mail messages and documents released in the report.
The Bush administration said the proposal was unsound science and an abuse of regulatory authority, a similar accusation leveled against Europe for its demand that genetically modified food be labeled as such before it is marketed.
European officials said the testing plan was necessary because of an increase in health problems like allergies and male infertility. The costs of cleaning up damage from chemicals like asbestos is already in the billions of dollars, they said.
The office of the United States trade representative asked the industry to develop themes the administration could use to discourage the European Union from adopting the new testing program, according to an e-mail message dated April 4, 2003, and obtained by the House investigator.
Catherine Novelli, the assistant United States trade representative for Europe, was cited in the e-mail message, which read: "At the last meeting, Cathy had tasked the industries to come up with 'themes' for their concerns about the proposed legislation. The chemical industry had done a list of themes dealing with the E.U. process."
Other e-mail messages describe the role of Secretary of State Colin L. Powell, top Commerce Department officials and officials from the Environmental Protection Agency in lobbying European countries, singling out several countries, especially Sweden and Finland.
One e-mail message from the trade officials urged the chemical industry to "get to the Swedes and Finns and neutralize their environmental arguments."
Richard Mills, the spokesman for the United States trade representative, said Thursday that the administration estimated that "one million jobs are on the line - you're darned right we raised our concerns with the European Union."
"The regulations would not help the environment because they were unworkable," Mr. Mills said. "We want regulations that protect the environment and don't stifle U.S. jobs and economic growth."
The report, requested by Representative Henry A. Waxman, Democrat of California, says that American environmental groups and the general public were kept out of the administration's closed discussions and strategy sessions.
"We were frozen out," said Joseph Digangi of the Environmental Health Fund, an advocacy group cited in the report. "The administration went directly to the U.S. chemical industry and adopted their position whole cloth."
Anthony Gooch, the spokesman for the European Commission in the United States, said of the report: "There would seem to be an inordinate weight given to only one side of a complex argument. Significant concerns about the environment and public health seem to be totally absent from their policy."
The lobbying efforts of the United States appear to have succeeded. The European Union revised the proposal, known as Registration, Evaluation and Authorization of Chemicals, or Reach.
Five months after trade officials sent e-mail messages discussing how to persuade senior European officials to demand new cost-benefit analyses, France, Germany and Britain wrote to the president of the European Commission requesting a new assessment of the effects that the program would have on the industry.
The American Chemistry Council, a trade group, noted in its 2003 annual report that it had "rallied opposition to the draft proposal, including a major intervention by the U.S. government."
"The questions the U.S. government is raising about the global impact of Reach are perfectly sensible," said Greg Lebedev, the president and chief executive of the American Chemistry Council. "American companies have a stake in Europe as investors, manufacturers and suppliers."
Under current rules, about 99 percent of the total volume of chemicals sold on the markets have not been subjected to testing requirements.
One subject of the lobbying proposal was Margot Wallstrom, commissioner for the environment at the European Union. In an April e-mail message, an official of the trade representative said: "But who will take on Wallstrom - the answer is only other ministers or heads of state. The U.S.G. plans to send in our ambassadors to member states and commission to make our case."
Ms. Wallstrom said that the reform proposal was necessary because "there is no control whatsoever of the 400 million tons of chemicals sold in the European Union each year."
Mr. Powell sent several cables on the issue. In one, he warned that $8.8 billion in products were at risk of being banned or severely restricted under Europe's proposed system, a figure from a study by the chemistry council. His cables were sent to trading partners in Latin America and Asia as well as Europe to oppose the proposal.
The main chemical regulation in the United States is the 1976 Toxic Substance Control Act, which has been widely criticized for being weak and too deferential to industry. The vast majority of nonpesticide chemicals are not subject to any required screening before introduction here.
Chemical Industry: Grasping the Implications of REACH
From Strafor.com
Summary
Proposed European Commission regulations -- known as REACH -- would impose significant new requirements on the European and U.S. chemical industries. Lobbying by the U.S. chemical industry has prompted the Bush administration to make the proposal an economic and diplomatic issue. U.S. environmentalists and some senators are pushing to align U.S. chemical policy with REACH. If REACH and REACH-inspired policies are successful, the global chemicals sector might look to a new international testing standard to minimize costs.
Analysis
The European Commission adopted a proposal in October 2003 for a chemicals regulation policy known as REACH (Registration, Evaluation and Authorization of Chemicals). The proposed regulations would force Europe's chemical industry to conduct extensive health and environmental safety tests for chemicals produced in significant quantity for use in industry. The U.S.
chemicals industry, which would have to comply with Europe's REACH standards in order to export to any European Union country, and the Bush administration are lobbying against its passage, citing the high costs of compliance. Although REACH does not have any near-term prospects for approval -- a vote on the proposal is not expected until 2005 -- the proposed REACH legislation is already serving as a model and benchmark for environmentalists seeking changes to chemicals regulation in the United States.
If REACH is approved in Europe and a similar chemicals policy is passed in the United States, the U.S. chemical industry could face having to conduct dual testing and to absorb double costs associated with testing and compliance. The U.S. government and the chemical industry might choose to shape an international collaborative chemical testing policy to streamline the testing process and minimize additional costs.
Following the release of the European Commission's 2001 "White Paper on Strategy for Future Chemicals Policy," which laid out the ideas that led to REACH, environmentalists in Europe and the United States began touting the program as a way to protect public health against the potentially negative effects of tens of thousands of untested chemicals. The passage of REACH would mandate greater pre-market testing of all chemicals in commercial use, lead to phaseouts of those chemicals deemed most harmful to public health and the environment and lead to testing of chemicals sold to Europe from major trade partners, including the United States. U.S. environmentalists began campaigning to push lawmakers to adopt similar testing programs for chemicals in this country, citing the protection of human health and the environment as their chief concern.
Environmentalist arguments in favor of REACH-like regulations have been heard by at least one senator. According to Inside EPA, a Washington newsletter, Sen. Frank Lautenberg, D-N.J., and several other congressmen will introduce legislation this year that would amend the 1976 Toxic Substances Control Act (TSCA), the main U.S. chemical regulation statute, to resemble REACH.
TSCA gives the Environmental Protection Agency (EPA) the authority to request testing data on certain chemicals from industry, but does not require testing of the majority of chemicals in commerce. The amendment under consideration would likely require industry to conduct testing on all chemicals produced in volumes greater than 1 ton, similar to the REACH program. It would also likely strengthen the EPA's role in banning chemicals deemed to pose a public health risk and place the burden of establishing a chemical's safety -- or potential for harm -- on industry rather than on the public or the EPA.
If REACH were approved in Europe, the U.S. chemical industry would face significant costs and challenges in complying with it to access the European market. The most obvious of these would be producing and managing the testing data for large numbers of chemical substances. The European Commission's impact assessment for REACH estimates that testing and registration costs would amount to 2.3 billion euros ($2.8 billion) over an 11-year period. The commission's estimate of the cost to downstream chemical users is roughly 2.8 to 4.0 billion euros ($3.4 to $4.8
billion) over the same period. This would bring the total cost to industry and its downstream customers at roughly 5.1 to 6.3 billion euros ($6.2 to $7.7 billion).
REACH requirements could pose other long-term challenges.
Adopting such a policy in the United States would fundamentally change how industry conducts business by codifying the precautionary principle in U.S. law. The precautionary principle provides a framework for forming environmental regulations based on "preventing harm" to the environment and/or human health.
Europe is more open to precaution-based guidelines than the United States: Europe instituted a defensive ban on U.S. hormone- treated beef because of uncertain health effects on humans, and is hesitant to approve genetically modified food. The U.S.
government places much more emphasis on cost-benefit analysis and risk assessment than on precaution.
Under a precaution-based chemical policy, industry would have to prove chemicals safe before putting them on the market, putting the onus of proving a product's safety on industry rather than the public. A REACH-like U.S. policy could make demands based on precaution -- such as phasing out certain chemicals and preventing the creation of new substances that are chemically similar to those already phased out -- much easier.
Such a policy could also mean the chemical industry would be open to legal claims -- like the pharmaceuticals industry currently faces -- based on "failure to warn" the public. Once extensive testing data are made available, gaps in the warning labels could become the basis for tort litigation.
The U.S. chemical industry is feeling the effects of rising natural gas prices for natural gas, the main source of energy and primary feedstock for many industrial chemicals. The industrial price of natural gas is approximately $5.50 per million BTUs, up from $3.78 per million in March 2002. If REACH is passed in Europe, the U.S. chemicals industry could be forced to look at cost-cutting measures, including increasing the speed with which it relocates production to other countries, possibly in Asia, that have lower gas prices.
The administration of U.S. President George W. Bush and the U.S.
chemical industry are lobbying EU member states to oppose REACH.
In March 2004, the U.S. government expanded its lobbying representatives to include U.S. Secretary of State Colin Powell, showing that the United States considers the REACH program a serious threat to industry. According to the Financial Times on March 29, Powell sent a cable to U.S. diplomats in the EU member states and 10 countries approved to join the European Union in May. Powell said, "The [U.S. government] continues to be concerned that the proposals will create a costly, disproportionately burdensome and complex regulatory system, which could prove difficult, if not unworkable, in its implementation. U.S. exports in most industrial sectors -- totaling tens of billions of dollars -- would be affected by the new policy."
Powell's intervention in the REACH debate signals the Bush administration's deep opposition to the proposed European regulations -- and presumably any similar program in the United States. It is rare to have a secretary of state intervene in a technical industry issue, particularly when the issue is still European. If John Kerry is elected in the fall, however, his administration could take a markedly different approach to the chemicals testing issue. Nevertheless, TSCA is becoming a battleground issue for chemicals policy; a large and -- sources say -- influential national environmental organization has said that amending TSCA to reflect REACH will be one of its key campaigns over the next year.
If the REACH proposal is passed in Europe -- and if TSCA is amended in the United States -- the U.S. government and the U.S.
chemical industry could spearhead discussion on the creation of an international policy to streamline the chemical testing process. There are several international chemical policy programs currently being discussed. Two are programs under U.N. auspices:
One seeks to meet the World Summit on Sustainable Development's
2002 agreement that by 2020 chemicals should be used and produced to minimize adverse human health and environmental effects; the second program would develop a classification and labeling system for chemicals. A third program, under the Organization for Economic Cooperation and Development, would focus on developing a testing and assessment program for chemicals produced in high volumes.
The United States would likely favor the OECD route because historically the United States has been more willing to join OECD talks than to participate in U.N.-sponsored programs. The United States prefers OECD because of the group's membership, which includes nations with large economies, and also because OECD does not have a permanent bureaucracy. It is also possible that U.S.
industry could choose to form a global chemicals policy -- not based on the precautionary principle -- to defuse the pressure from REACH in Europe in the absence of the passage of similar regulatory changes in the United States.