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REACH: Coming to a Shore Near You

When it comes to regulatory policy, it seems that among the few voices of reason in the Europe today is an American. In today's Wall Street Journal Europe, U.S. Ambassador to the EU, C. Boyden Gray, has outlined the inanity of the proposed chemicals policy—the so called REACH policy—that European legislators are expected to pass into law before the new year. REACH is the acronym for the appropriately bureaucratic name of the policy: Registration, Evaluation, and Authorization, of Chemicals. Yes—believe it or not—some companies will undergo that many bureaucratic steps before doing business in Europe. The program is based on the precautionary principle, which demands that firms prove their products safe before introducing them into commerce—a standard that is impossible to meet. The result is will likely be arbitrary bans and regulations on many politically unpopular products. As Gray notes, REACH will have worldwide impacts: “These factors explain why virtually every non-EU country with a chemicals industry has joined the U.S. in voicing serious concerns about Reach. This “coalition of the excluded” includes South Africa, which is worried that Reach will cripple the mining industry in some of the poorest parts of the developing world. At the other end of the spectrum are sophisticated high-tech producers in South Korea, India, Japan and Israel … … The EU response has not been encouraging on the whole, although some sympathetic national governments and members of the European Parliament have quietly tried to help. The EU's “party line” is that the current proposal is “balanced” and that the EU's trading partners have no choice but to comply. This is hardly the response one would expect from a major trading partner, particularly one that is striving for “better regulation.” For this reason, Reach may have consequences beyond the chemical industry because of the signals it sends about the development of regulations generally. The more regulation's unnecessary costs exceed its benefits, the greater the negative impacts on investment, innovation, job creation and economic growth.” To make matters worse, REACH may soon come to a shore near you. Members of Congress are considering U.S. versions of the law and it may soon be pushed as a global policy through the United Nations. To read more, see the study that CEI co-produced with the Hayek Institute, Brussels and a recent update.