10 July 2008 21:18 [Source: ICIS news]
By Joseph Chang
NEW YORK (ICIS news)--Chemical manufacturers outside of the EU could benefit in the short term from the EU’s Registration, Evaluation and Authorisation of Chemicals (Reach) programme, the chairman of a trade group said on Thursday.
“A buyer of a chemical that manufactures finished products in Europe may eventually realise that he will have to pay for the testing costs under Reach, because those costs will be passed through from the producer,” said Charles Hinnant, chairman of the Synthetic Organic Chemical Manufacturers Association (SOCMA).
“The buyer may decide not to buy the chemical and formulate in Europe at all, but just outsource the entire production to the US, China or India,” he said.
If a company in Europe is the only supplier of a particular chemical and exports it to the US or elsewhere, it may make more sense for the company to outsource the production of that product outside of Europe, Hinnant said.
“Global manufacturers may shift production from the EU to other areas to avoid Reach if the final product is not destined for the EU,” he said. “They would never have to register that chemical under Reach.”
“That would be advantageous for US-based custom manufacturers as well,” Hinnant said. “Some companies are, in fact, talking with European firms about this exact situation.”
For more analysis and insight on Reach and the impact of other regulations on chemical SMEs ,look for the 28 July issue of ICIS Chemical Business magazine
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