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.