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Bush Gang Reject New EU Regulations on Toxic Chemicals

May 8, 2003
Europe Plan on Chemicals Seen as Threat to U.S. Exports
By ELIZABETH BECKER and JENNIFER 8. LEE

WASHINGTON, May 7 - The European Union announced a proposal today
that would require manufacturers of industrial chemicals to test their products
before they can be used, a change that the Bush administration said could threaten
the $20 billion in chemicals that the United States exports to Europe each
year.

Five years in the making, the proposal, which requires the approval of
European governments and the European Parliament, would shift the burden to
prove the safety of chemicals onto manufacturers instead of governments. The
tests would be registered with a new agency. Under current rules, about 99
percent of the total volume of chemicals sold on the markets have not been
subjected to testing requirements.

"There is no control whatsoever of the 400 million tons of chemicals sold in
the European Union each year," said Margot Wallstrom, Europe's environment
commissioner, at a news conference. "Our reform proposal therefore requires
industry to provide public information on the chemicals they produce or
import and the risks associated with their use."

The American chemical industry has lobbied hard against the proposal,
criticizing it as excessive, bureaucratic and unnecessary.

"One of the basic problems with Europe's approach is that it needs all the
information on all chemicals in order to make those decisions," said Mike
Walls, senior counsel to the American Chemistry Council trade group. The
European chemical industry has also criticized the proposal, though not as
harshly.

The dispute follows a pattern of Europe's trying to impose stricter
environmental rules, which the United States then labels as unnecessary,
costly and potential trade barriers.

European officials said today that their proposed testing was aimed at
improving public health and the environment at a time when health problems
like allergies and male infertility are rising. The costs of cleaning up
damage from chemicals like asbestos is already in the billions of dollars.

To the Bush administration, the proposal amounts to unsound science and an
abuse of regulatory authority, complaints American officials have already
leveled against Europe for its concern about genetically modified food and a
plan to require that all such food, known as genetically modified organisms,
be labeled to alert consumers.

"This is a big game; it will dwarf the G.M.O. dispute," said William Lash,
assistant secretary of commerce for market access and compliance. "Any
benefit they gain from these tests will be outstripped by the cost."

Some representatives of European environmental groups have labeled the
proposal a disappointment. They said they had hoped the proposal would move
faster and that it would include tougher safeguards, like an obligation for
industry to stop using hazardous chemicals when a safer alternative is
available.

"It comes down to one question: Do we want to phase out the chemicals that
accumulate in wildlife and ourselves, and those that disrupt our hormones?"
said Michael Warhurst of the World Wildlife Fund. "I believe that the
European public does, and the European Commission is failing to get moving
on this crucial task."

European officials stressed to critics that this was the beginning of a
debate on how best to regulate chemicals. The 1,200-page plan was posted
today on the union Web site, which invited comments.

But White House officials already have enlisted other trading partners in
Latin America and Asia to oppose the European proposal. If enough changes
are not made, the administration could consider challenging the rules before
the World Trade Organization as a restraint on trade.

"We are concerned that this is potentially a trade barrier," said a senior
trade official who spoke on the condition of anonymity. "This would have a
huge extraterritorial effect here and in Asia, with Europe imposing its
rules on everyone else."

Commerce officials are holding public meetings to organize industry
opposition to the testing plan arguing that there must be a far cheaper way
to protect the environment and public health. European officials said the
chemical testing could cost at least $3 billion over 20 years.

The European Union is the world's largest chemical producer, accounting for
about 28 percent of the world output. The industry, Europe's third largest
in manufacturing, employs 1.7 million directly and some 3 million people
indirectly.

Some experts say that the Europeans are too lax in their oversight.
"The European chemical industry understands that there is a need for a
fundamental change," said Joel Tickner, a professor at the University of
Massachusetts at Lowell. "It really has upset their colleagues in the United
States."

Under the European proposal, manufacturers and importers of chemicals would
be required to submit paperwork and tests documenting the safety of
chemicals. The more hazardous chemicals and those used in the greatest
volume would be subject to the greatest scrutiny.

In contrast, 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.

The European chemical industry has tempered its criticism of the new
proposal, focusing on the application of the tests rather than the premise.

"The initial white paper looked promising, balancing the social aspect,
environment aspect and the economic aspect," said Marc Devisscher, a
spokesman for Cefic, the European Chemical Industry Council. "We feel the
environmental pillar is a little bit too dominant. It will end up in a huge
bureaucracy."

The European Union also announced today that it had won approval from the
World Trade Organization to impose duties worth $4 billion on American
imports unless the United States repeals a law giving tax breaks to American
exporters through foreign sales corporations.

Senator Charles E. Grassley, Republican of Iowa and chairman of the Finance
Committee, said today that he was committed to passing legislation to avoid
the penalties. Two representatives, Philip Crane, Republican of Illinois,
and Charles B. Rangel, Democrat of New York, introduced a bill last month
that they said would comply with the W.T.O. ruling.

-------

EU Bows To Industry, Exempting Chemicals Under New Rules

DOW JONES NEWSWIRES
-By Matthew Newman, Dow Jones
Newswires;322-285-0133;matthew.newman@dowjones.com

BRUSSELS -- Bowing to intense industry lobbying, the European Union
Commission Wednesday watered down its controversial proposals to test for
safety 30,000 chemicals already used and sold in Europe.

The Commission exempted the majority of chemicals from strict testing and
registration rules used in the manufacture of other substances, as long as
there's no contact with humans. Certain plastics also are exempted.

In another concession to industry, the Commission will give businesses two
months - rather than five weeks - to comment on its proposals.

The rules still represent a sharp tightening that would force companies to
register and test their products. The rules will also create an E.U.
chemicals agency to monitor registration.

In a first reaction to the watered-down proposals, Europe's chemical
industry said Wednesday's plan could wipe out as many as 1.7 million jobs
and are too much driven by environmental concerns.

But environmental groups are outraged, saying the new measures don't go far
enough to restrict chemicals that can cause cancer.

"According to recent polls, 38% of Europeans are very worried over the use
of chemicals," said Mary Taylor of the Friends of the Earth environmental
group.

Greens were particularly angry at the Commission's decision to exclude many
so-called "intermediate" chemicals that never leave factories and are used
as building blocks for other products.

"This is a problem for workplace safety," said Stefan Scheuer, policy
officer at the European Environmental Bureau. "There can be exposure to
workers."

Almost all chemicals were included when the reforms were first discussed two
years ago.

The E.U. made substantial changes following intense lobbying on both sides
of the Atlantic. In addition to exempting many intermediate chemicals, only
companies that make or import more than 1 ton a year of a product have to
register it. Businesses had complained that small quantities would be
included.

The revisions caused a major row within the Commission. Environment
Commissioner Margot Wallstrom campaigned for a tough line. But Industry
Commissioner Erkii Liikanen feared sparking another trans-Atlantic trade
tussle and hurting Europe's competitiveness.

"We want to avoid costly and time-consuming testing of chemicals," Liikanen
told reporters. "The information required (now) is proportionate and
realistic."

Despite the changes from the initial draft, industry still wants more. Jan
Baszak, spokesman for the European Chemical Industry Council, is demanding a
blanket exemption for intermediates. The current plan calls for only half to
be exempted, leaving 40,000 facing registration.

"We don't see a good reason for including them because there doesn't seem to
be a risk," Baszak said. "Our main concern is overloading the system."

The U.S. expressed similar concerns, painting a grim picture of how the
E.U.'s changes would affect the global $1.7 trillion-a-year chemicals
industry . A U.S. report calls the new system "costly, burdensome and
complex," and adds it might "prove unworkable in its implementation."

All groups now have two months to comment on the proposal. The E.U.
executive then will put a legislative proposal to the 15 E.U. governments
and the European Parliament. It hopes a new law can take effect in two
years.

-By Matthew Newman, Dow Jones
Newswires;322-285-0133;matthew.newman@dowjones.com


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