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Trade & Customs - European Union

 

On November 9 2007 many World Trade Organization (WTO) members expressed concern during a meeting of the Technical Barriers to Trade Committee over the EU Regulation on the Registration, Evaluation, Authorization and Restriction of Chemicals 1907/2006 (REACH), which regulates the production and marketing of chemical substances in the European Union.

REACH requires EU manufacturers and importers of chemical substances (whether on their own, in preparations or in certain articles) to gather comprehensive information on the properties of their substances produced or imported in volumes of one tonne or more per year and to register such substances before manufacturing in or importing into the European Union. If the registered substance is deemed to be dangerous, it may be subject to various restrictions including the need to obtain authorization to market or use it. The regulation took effect on June 1 2007 and is being phased in over 11 years.

According to a press release issued by the WTO, Argentina raised several concerns at the committee meeting, including:

  • the complexity of the rules and the regulation's ambiguous terms;
  • the possible lack of uniformity in the application of the regulation in all EU member states;
  • the onerous procedures that must be followed; and
  • its application to non-EU entities including small and medium-sized companies.

Australia, Brazil, Canada, Chile, China, Japan, Korea, Mexico, Taiwan, Thailand and the United States sided with Argentina, with some countries complaining about a lack of information.

 The European Union reportedly responded by pointing out that REACH has already been amended at the drafting stage to reflect various comments it received. It noted that the European Commission was responsible for uniform application of the regulation. Further, it argued that REACH does not discriminate against foreign companies because the same conditions apply to all companies in and outside the European Union, including small and medium-sized companies. The European Union also stated that information regarding REACH was available on the Internet.

This is not the first time REACH has been the topic of discussion in the committee. According to the WTO, REACH has been discussed in 15 meetings of the committee since March 2003, with more than 20 WTO members expressing various concerns.

One of the main issues raised in previous meetings was that REACH may not conform to a WTO rule requiring technical regulations not to be more trade-restrictive than necessary. In this context, some members pointed to the overall complexity of REACH and questioned its workability, the burden on the industry, the possibility of duplication of testing and risk assessments, and the appropriateness of the criteria used in evaluating the substances, which may lead to improper or disproportionate import restrictions.

Another major concern expressed by WTO members was the need for special and differential treatment of developing countries, which is another element of WTO rules on technical barriers to trade. Several developing countries expressed doubt about the ability of their industry to comply with REACH, particularly small and medium-sized companies. In this regard, the European Union noted that extensive guidance material, technical assistance and capacity building is planned and a help desk has been set up within the relevant EU agency as well as within each EU member state.

Other issues raised by various WTO members include:

  • REACH's compatibility with international initiatives such as the International Council of Chemical Association's High Production Volume Programme and the Globally Harmonized System of Classification and Labelling of Chemicals;
  • the protection of confidential information;
  • the mandatory substitution of substances that are deemed hazardous;
  • the requirement for registering monomers used in polymers; and
  • the interpretation of 'chemically modified' substances which are otherwise exempt from registration requirements.

Although the European Union will face an uphill struggle in trying to gain positive acceptance of its novel burden-sharing rules in the chemicals sector (ie, with the burden being placed squarely on industry's shoulders), it strongly argues that such a regulation is necessary in light of the more than 100,000 chemicals currently being placed on the market and the sheer lack of safety information in relation to a majority of these chemicals.

 

International Law Office