It’s been difficult for American chemical companies to crack the European market because the safety standards there are tougher than they are in the U.S. But that might be changing.
A pending free trade deal with the European Union, known as the Transatlantic Trade and Investment Partnership, might include broad changes to how products that contain chemicals, including everyday household items such as cosmetics and cleaners, are regulated on both sides of the Atlantic.
A wide variety of chemicals used in manufacturing a host of products are available in the U.S. but banned in the 28-nation EU because they’ve been linked to cancer and birth defects. The chemical industry wants to see a unified set of standards. It argues that domestic regulations for chemicals are based on “science” while the European prohibitions are rooted in precaution. The effect, the industry says, is to block American products from finding new markets.
“Our industry cannot afford to have the EU set up another enormous barrier to trade,” said Bill Allmond, vice president and senior lobbyist for the Society of Chemical Manufacturers and Affiliates, the trade and marketing association for the industry.
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After the latest round of negotiations last month in Brussels, Assistant U.S. Trade Representative Dan Mullaney and Spain’s Ignacio Garcia Bercero, his European counterpart, presented a united front, promising that a trade deal would include more standardized regulations across the Atlantic.
Critics, however, claim that the negotiations are being kept secret from the public.
“It appears the EU and U.S. regulators have bought the chemical industry’s argument that this trade deal should go beyond trade to regulation,” said Ben Beachy, the research director of Global Trade Watch, a division of Public Citizen, a nonpartisan public policy group.
At a public stakeholders meeting on the trade pact last December in Washington, Celia Wexler of the Union of Concerned Scientists, a nonpartisan advocacy alliance of scientists and others, said the event was so disorganized that it was difficult even to identify the trade representatives.
“It was very hard to know what was happening and who was there,” Wexler said.
The U.S. Trade Representative’s Office didn’t respond to requests for comment.
Known as REACH – Registration, Evaluation, Authorization and Restriction of Chemicals – the European standards require companies to submit new chemicals to testing before they can be placed on the market. Chemicals already in use also had to pass the tests. The U.S. passed a similar law in 1976, but it affected only new chemical products; those already in use were grandfathered in.
For cosmetics, the EU requires products to undergo testing, while the U.S. Food and Drug Administration leaves it up to the manufacturer to determine a product’s safety.
Most European consumers may not be aware of the full implications of the proposed trade deal, said Sylvia Maurer, an expert on the pact for the European Consumer Organization, a Brussels-based consumer advocacy group. But they’ll notice if REACH standards are relaxed and new American products are allowed to hit the shelves, she said.
Spic and Span and Scrubbing Bubbles are just two of the common American household brands that are illegal in the EU because of the chemicals they contain, according to the Environmental Working Group, a nonpartisan public health and environmental policy organization. Some bakers in the U.S. use potassium bromate to improve flour, but the EU bans it because it’s considered a carcinogen.
“More needs to be done to protect society, not less,” Maurer said.
She said her organization wasn’t opposed to the trade pact, nor were other consumer advocates who spoke with McClatchy, as long as the trade agreement focuses on tariffs and not reducing safety standards.
The costs of doing business in Europe, including tariffs and complying with regulations, can often be absorbed by large corporations, Mullaney said at a Brussels news conference last month, but “can be a brick wall” for small and medium-size companies.
Jay Dickson, the president and owner of Nation Ford Chemical, a family-operated manufacturer in the Charlotte suburb of Fort Mill, S.C., said that when his company decided to begin selling a new product in Europe in 2010, it split the cost of testing with a Portuguese manufacturer, each paying $200,000.
Dickson makes a chemical that’s used in yellow food dye and in pills for Crohn’s disease. While he also has to pay $30,000 annually to a German company that represents his product to EU regulators, Dickson is more concerned with reducing tariffs, which cost his buyers in Europe $390,000 annually.
“Companies like ours would give up the argument on REACH to get the duties eliminated between the U.S. and EU,” he said.
By increasing trade to the EU, where his only competitor is the Portuguese company with which he split the costs of testing, Dickson could lessen the impact on his business from a flood of Asian manufacturers that sell their cheaper products to other markets, he said.
“Our only competition usually is China or India,” he said. “Both Europe and America would benefit from this partnership because it would make both more competitive with the Far East.”
Whether Europe would accept an overhaul of its chemical safety standards remains in question. Recent negotiations in Brussels have drawn a large number of protests from European citizens who like the standards. In addition, allegations that the U.S. spied on German Chancellor Angela Merkel have left many Europeans distrustful of the U.S.
“There is tremendous skepticism in Europe that this is going to go forward,” said Gary Clyde Hufbauer, an expert on trade policy for the Peterson Institute for International Economics, a nonpartisan Washington research center. “The Europeans are not very keen on modifying their chemical directive.”