(01/13/05) Clyde Prestowitz on Minnesota Public Radio

Clyde Prestowitz on Minnesota Public Radio: Marketplace (1/13/05)  

Analysis: European Commission is turning out new health and safety rules, some which will affect US businesses
 
(c) Copyright 2005, Minnesota Public Radio. All Rights Reserved.

DAVID BROWN, anchor: Americans are proud of their independence. Yet in at least one respect, the US may be falling to foreign domination. The European Commission is turning out a raft of new health and safety rules, and some of them will wind up affecting US businesses, whether Americans like it or not. Over the next few weeks, we're going to be reporting on these changes in a series prepared in collaboration with the Center for Investigative Reporting. Our series is called Brussels Clout, and we begin with a look at a major change in how the chemical industry might be regulated. MARKETPLACE's European bureau chief Stephen Beard takes us into a typical home in London.

STEPHEN BEARD reporting:

Mary Taylor is looking for dangerous chemicals in her kitchen cupboard.

Ms. MARY TAYLOR (Friends of the Earth): Lots of fairly typical household cleaners in here.

BEARD: Dish-washing liquid, soap powder, stain remover, oven cleaner--every bottle and packet promises sparkling results, but Mary has no idea exactly what they contain or really how safe they are.

Ms. TAYLOR: There's probably hundreds of chemicals in here as well. It's quite a nasty old mix. And we can't even really tell exactly what's in here, I'm afraid to say.

BEARD: Consumers are now exposed to thousands of chemicals in cleaning products, clothing and in children's toys, in cell phones and computers and many other manufactured goods. In many cases, these chemicals have not been properly tested, says Mary Taylor, who's chemical safety campaigner with Friends of the Earth.

Ms. TAYLOR: Certain types of cancer are increasing, certain types of reproductive defects are increasing, for example, birth defects as well, and there are growing suspicions that some of these chemicals are to blame. But on the whole, we don't know which ones exactly, and we need to get that basic information.

BEARD: Phthalates, which are used to soften plastics in food wrapping and even children's toys, are called gender benders because they're thought to disrupt sexual development. Friends of the Earth fears that many other such chemicals could be doing us harm. (

Excerpt from rap song)

Unidentified Group: (Singing) ...learn about chemical safety. Chemical safety.

Unidentified Man #1: (Singing) It's important to learn.

Unidentified Group: (Singing) Chemical safety.

Unidentified Man #1: (Singing) It's a dire concern.

BEARD: This rap, produced by the World Health Organization, underlines the growing anxiety. The EU shares that concern and is determined to plug what it says is a gaping hole in its chemical safety laws, which it inherited from America. In 1979, the US passed a law which only required the testing of new chemicals. The Europeans followed suit, but that has left the 80 percent of chemicals still in use on both continents untested, says Belgian member of the European Parliament Bart Staes.

Mr. BART STAES (European Parliament): More than 100,000 chemical substances exist, of which no real information is distributed on influence those products have on health, on environments.

BEARD: The EU's solution, which has already been 10 years in the making, is a regulation called REACH: Registration, Evaluation and Authorization of Chemicals. It will require manufacturers to test at their own expense tens of thousands of substances, and that's not just European manufacturers. American companies export $20 billion worth of chemicals to the EU every year. If those exports don't comply, they'll be banned.

Mr. STAES: If you vote a regulation where you try to protect public health, I think you should involve not only the products produced in Europe but as well in other parts of the world, including the United States.

Unidentified Man #2: This is called a reactor. It's completely lined with glass. You can see all the walls and stirrers, everything--the baffles, everything is covered with glass.

BEARD: Chemical manufacturers like this one in the English Midlands are very nervous about REACH. They agree that safety testing must be extended, but they argue it's insane to test tens of thousands of chemicals, including, for example, the ingredients that go into salt and vinegar. Alistair Steel, who runs Rhodia UK, is highly critical of the planned regulation.

Mr. ALISTAIR STEEL (Rhodia UK): It is quite a headache. In basic terms, it means that we would have to carry out a lot of new testing on over 100 products, and that would involve a cost of some tens of millions of euros.

BEARD: Even the European Commission now estimates that the total cost of implementing REACH admittedly, spread out over 15 years, could be as high as $6 1/2 billion.

Mr. STEEL: I'm sure it was launched with the very best of intentions, but I think they totally misunderstood the enormity of the job that was ahead of them.

BROWN: European chemical manufacturers are terrified of losing out to foreign rivals. They're demanding that all foreign goods imported into the EU which contain any chemicals at all, like cars and computers, for example, should also be subject to the regulation. That could affect $400 billion worth of American exports, reason enough for the US to be following this closely. Clyde Prestowitz , who was an official in the Reagan administration.

Mr. CLYDE PRESTOWITZ (Former Reagan Official): Americans are in for a rude shock, believe me. The United States is not going to dictate standards anymore. Economically, Europe stands toe to toe with the US. We can't dictate to them, we need to negotiate with them and that's just the way it's going to be.

BEARD: There's likely to be more than a year of wrangling before REACH becomes law. A US lobbying campaign has been quietly under way in Brussels for months. It's likely to grow more vociferous. From the European desk in London, this is Stephen Beard for MARKETPLACE