| Submit your comments on this article |
| Europe |
| EU About to Shoot at US, Japan, Aussies ... Foot Wound Predicted |
| 2005-05-10 |
| Ten of the European Union's leading trade partners have been barred from attending a high-level meeting to discuss the EU's planned overhaul of its chemicals legislation, even though the new rules could have a substantial impact on the 10 countries' exports. The 10 countries, which include Australia, the US, Japan and South Africa, asked formally at the end of February to take part in the two-day meeting, which starts on Tuesday in Luxembourg and comes ahead of the European Parliament's crucial review of the draft chemicals legislation. A European Commission spokeswoman said: "The Commission feels that we have to discuss among ourselves this internal business and it is not prudent to invite people from outside." Underlining the depth and range of concerns sparked by the EU chemicals reform, which is known as Reach, Australia published a study on Monday that suggests Reach would reduce Australian exports of key mineral products to Europe. The impact would be partly mitigated by the diversion of exports to other fast-growing markets, most notably China, and the study also concluded that Reach could lead to the relocation of metals processing from Europe to Asia. Australian and US officials expressed disappointment on Monday at the EU's decision to bar them from the meeting. Peter Grey, Australia's ambassador to the EU, said: "There are very important indirect costs linked to Reach and those cannot be overlooked." The Australian government urged the European Parliament yesterday to amend the draft legislation to exclude minerals, ores and concentrates. Separately, an EU study obtained by the FT and due to be released on Tuesday found the planned overhaul of rules governing the chemicals industry could impose a particularly significant burden on textile companies. That's the EU textile industry that is bleeding from Chinese competition already ... but of course that's in the poorer EU countries so who cares? What's that? You say the French textile cos. are hurting? Watch those feet as you aim that gun, commissioners. The study, part of a series of recent surveys examining the draft regulations' impact on business, suggests companies would have to abandon the production and use of several critically important substances because of the higher costs required by the proposal. The study claims textile companies would be unable to pass on these higher costs to their customers. These findings are likely to add to the controversy surrounding the proposed new chemicals regime. Textile companies are already suffering from the recent abolition of trade-restricting import quotas, which has led to a steep rise in textile imports from countries such as China and India. Reach, which was proposed by the European Commission, would force businesses to register some 30,000 substances with a new European chemicals agency. Companies would have to show that these substances cannot endanger humans and the environment, a requirement likely to demand expensive and time-consuming testing. But Reach's supporters say this is necessary because thousands of substances currently in use have never been properly assessed and they suspect some of them to be responsible for environmental damage and ailments such as allergies. Yup, gotta impose trade restrictions on successful capitalist countries when you suspect something. The chemicals industry and other business organisations have long complained the new rules would impose heavy costs, lead to job losses and force companies to move abroad. Reach needs to be endorsed by the parliament and EU member states, in a legislative review that could lead to big changes. these sanctimonious idiots are trying to hurt other countries and will end up crippling themselves too, but not before causing lots of damage. |
| Posted by:too true |
| #28 Too True, The few testing jobs added will be government jobs. Replacing tax producers w/tax consumers is not good,short,long or medium term. Further,the giant companies wanted less competition because they aren't able to export as is,and they wanted to raise the imports prices. Driving out of business the smaller lower-priced firms will not help the bigs export more so there will be no boost in exports. They may be able to sell more in the EU zone,but at the higher average prices there will also be fewer people buying.(If before the bigs sold 5mil of something and the littles 2mil,now the bigs sell 6mil and no little sales,this is bad for consumers and the state as far fewer taxes are pd and fewer people are employed.) |
| Posted by: Stephen 2005-05-10 23:06 |
| #27 In the short run there will not only be new testing jobs, there will also be new jobs in the big EU companies to replace imports. Yes, some small cos will go out of business ... but the EU economy is far less dependent on them than we are. In the middle run everything you say is true ... IF the market is allowed to function. But Brussels exists to prevent that. In the long run this is a disaster for them. |
| Posted by: too true 2005-05-10 20:13 |
| #26 Too True, In the short rumn any number of snall businesses will be driven out of business as they cannot afford the testing fees. An earlier commentary on the EUReferendum blog demonstated how this would devastate the Euro textile industry. If the EU thought for a minute this Directive would add jobs,they would be falling all over themselves to announce the good news. instead ...silence. |
| Posted by: Stephen 2005-05-10 19:32 |
| #25 In the short run this will create jobs there, an economic advantage for them Nah, creating jobs that do not result in an increase in either volume or quality of product result in economic disadvantage. The only economic advantage is to their competitors who get to sell more product. |
| Posted by: phil_b 2005-05-10 19:30 |
| #24 We need U.S. standards. ISAY-FU |
| Posted by: Shipman 2005-05-10 18:12 |
| #23 In the short run this will create jobs there, an economic advantage for them and possibly a capital inflow there. Which will cement the leftists in power - which is the point. |
| Posted by: too true 2005-05-10 18:08 |
| #22 What if we and the Asians just said NO! That of course would mean the our products would not ship there, but I am sure that we could, in turn, make it very difficult for their products to ship here. The companies whose identity crosses international boundries (Mercedes, Glaxo, etc.) would look at where the greatest opportunity lay and go there...that would not be in Europe BTW. If the cost of doing business in/with Europe is too high, then business will not be done there. It should be interesting to see their economy start the death spiral. |
| Posted by: remoteman 2005-05-10 16:48 |
| #21 The concept of a 'trade war' is largely an invention of the media. The WTO endeavours to create a level playing field for world trade, but allows exceptions for environmental and health reasons (as well as other reasons), which countries exploit to create non-tarrif barriers to trade. The reality is that trade barriers hurt the buyer more than the seller (in the aggregate) becuase the buyer pays more for a generally inferior product, whereas the seller can always sell to someone else. Lex has a point that the EU is a large market and regulations they impose can become universal because of economies of scale, but otherwise why should we care what the Euros do. If they want to regulate themselves out of the chemicals business for irrational reasons then let them. |
| Posted by: phil_b 2005-05-10 16:43 |
| #20 aka Lex; The REACH Directive doesn't just pertain to the chemical industry,it reaches out and touches ANYTHING that has chemicals involved. For a minor example-the plastic model industry. Under REACH,every chemical compound involved in the plastic will have to be tested and then certified as safe-by an EU certification system that doesn't exist yet-just imagine the backlog when it gets started.The solvent that cleans the finished products will have to be certified.Same again for the assorted glues and paints to assemble the model. Even the cardboard box will need to be certified if chemicals are used in any way in making the paper. The REACH Directive can be used to regulate virtually every manufactured item. Why else would a Directive on chemicals effect textiles-because the assorted colors are made by chemical dyes. I for one seriously doubt that the EU bureaucrats will refrain from using their power. As usual w/the EU,the major corporations(in this case German chemical giants)asked for help in getting rid of minor competition and the EU staff took such a request and turned it into an economy-killer. |
| Posted by: Stephen 2005-05-10 16:28 |
| #19 .com I don't think that they will risk a full on trade war, but are fully engaged with us in the economic equivalent of assymetric warfare. The reason that they are going after chemicals is because they were so damn successful with the lead-free solder thing. Yep. No electronics can ship anywhere in the OECD now with lead-based solder. Of course this has cost the (mostly non-EU) electronics business billions that they could have invested elsewhere, which is exactly the point. Oh, and non-lead based solders are either very expensive or suck. Someone called this a Gulliver strategy in an editorial a few years back. Think of a self assembling team of Lilliputians (Chirac, Schroeder, Lula, Chavez, and any other corrupt loser with a crappy economy he can't revive). Individually, you can't take on the Gulliver. But if you catch him unawares, then you can try to bind him with thousands of tiny ropes. The ropes have names: ICC, GM food ban, lead free solder, "anti-trust," Reach, etc, ad infinitum. Collectively, they start shaving basis points off US and Asian economic growth. So Lex its not just one industry. It's dozens and growing. And every one of those basis points of lost growth probably translates to tens of thousands of jobs. And remember, every dollar of wealth paid out equals 1/(savings rate) dollars added to the money supply. One good paying job in the chemical industry may pay for ten or twenty McJobs. Eventually we'll get tired of this tranzi crap. Damn, the next decade's gonna be interesting. I'm glad I still have 20 good years ahead of me. |
| Posted by: 11A5S 2005-05-10 15:55 |
| #18 I see a comming EU version of "Smoot Hawley." Europe is blind to it's actual internal problems. Continued moves in this direction will lead to a world wide depression. |
| Posted by: Sock Puppet 0’ Doom 2005-05-10 15:41 |
| #17 It's a work in progress, Barbara, heh heh. They are now overregulated, but are working on more, and they are pricing themselves out of the market. |
| Posted by: Alaska Paul 2005-05-10 13:45 |
| #16 lex - Sheesh. I guess we can all go home then. You dissed my comment out of hand - and implied in both of yours that my comment came from this story or the bag of MSM memes. No - I guess you didn't read me very closely. It doesn't. And I'm no gullible noob or conspiracy nut, either. There have been little shit-storms being played out over the last few yrs... steel subsidies, genetic engineered crops, MS being looted, etc. The bits look like they're converging to me - into something bigger. I thought it might be clearer to others who live in the financials world. Now I know what you think, so Thx, so much. HAND. Aw Fuck it. Nothing to see here, folks. Move along. |
| Posted by: .com 2005-05-10 12:30 |
#15 All the EU will become is a fortress of bureacracy, bound by a sandbagged wall of regulations.You mean like they are now, AP? ;-p |
| Posted by: Barbara Skolaut 2005-05-10 12:12 |
| #14 Honda derives most of its profit from, and manufactures a very high % of its vehicles in, the US. And soybeans. Don't forget the soybeans. |
| Posted by: Jackal 2005-05-10 12:05 |
| #13 Lex is onto something. If the EUniks try this heavy-handed over-regulated approach, the world market will adjust itself and go around the EU. All the EU will become is a fortress of bureacracy, bound by a sandbagged wall of regulations. |
| Posted by: Alaska Paul 2005-05-10 11:47 |
| #12 There won't be a "trade war". This is nothing more than the usual jousting prior to the trade lawyers coming together to figure out a compromise. The most ridiculous aspect of the "trade war" meme is the notion that multinationals somehow "belong" to one country or another. Is DaimlerChrysler a German or an American company? What about Ford/Volvo/Jaguar? How about GlaxoSmithKline? Honda derives most of its profit from, and manufactures a very high % of its vehicles in, the US. Is it really accurate to say Honda's Japanese? |
| Posted by: thibaud (aka lex) 2005-05-10 11:21 |
| #11 It's not that big a deal for the US economy overall. First, the MSM invariably blows these things way out of proportion, partly because of their inability to do any hard economic or quantitative analysis. Also becausethey can't resist the ready-made story angle: Conflict! Trade WAR!! Finally, lefty journalists love the EU trade war angle because it supports their bogus new meme of the EU as a "moral superpower" that can stand up to Chimpy BusHitler and hit him/us where it hurts. The facts are that these regs will have very little effect outside the chemicals industry, an old industrial dinosaur whose contribution to US economic and jobs growth is minuscule. |
| Posted by: thibaud (aka lex) 2005-05-10 11:13 |
| #10 Yes, .com, I think the Euros are provoking a full-fledged trade war. Their own international regs are crushing them, so they seek to deflect the anger and the competition outward. Watch Lula and others around the world join them, in an attack at the US. |
| Posted by: too true 2005-05-10 11:03 |
| #9 Not a big deal. If something needs to be done, then it'll get done bothering with any consideration of what the EU bureaucrats think. (or the UN, for that matter) As you were. |
| Posted by: Bomb-a-rama 2005-05-10 10:40 |
| #8 Sounds like the MCS loons are in control. That's not a good thing. |
| Posted by: mojo 2005-05-10 10:27 |
| #7 We looked away during the bananas bit but that should have been a warning. Yes, com, I think you are right. BTW... with the propaganda lately their people really really hate us so the pill will taste better to the idiot masses. |
| Posted by: 3dc 2005-05-10 10:11 |
| #6 Ronald Reagan: If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it. |
| Posted by: Matt 2005-05-10 10:09 |
| #5 And they still wonder why they are falling behind the US. Dumbasses... |
| Posted by: mmurray821 2005-05-10 10:09 |
| #4 Is anyone in RB predicting / ready to predict / suspecting that the EU will start a full-fledged trade war? With all the givens, tanking economies, new-found power to extort money from Us Corps (think: Microsoft), EU Member Govt-subsidized businesses undercutting, threatening, and bribing customers to win business from bona-fide commercial businesses (think: Boeing), over-regulated EU industries choked by idiot bureaucrats unable to compete, ad infinitum ad nauseum -- I'm wondering... it's beginning to look like a major collision, a no-shit no punches pulled knock-down drag-out trade war is ahead. You guys with all the snazzy financial expertise wanna take a shot at this? Yeah, I know there are gazillions of factors, but it seems that push is, indeed, coming to shove - and there's going to be some very desperate people, on both sides of the Atlantic, with a LOT to lose and a BIG dose of influence with the various Govts. Jobs, baby, that's the true third rail of all politics - so they will be listened to, for better or worse. This is very Big JuJu, methinks, that has been cooking for quite awhile as the EU strapped on its green eyeshades and patented "See No Evil In Bureacracy" blinders and proceeded to regulate itself out of business - seems to be coming to a boil. So any takers with a quick shot to offer? We'll keep it civil, too, right? ;-) |
| Posted by: .com 2005-05-10 10:05 |
| #3 stifling bureaucracy is how the EU elites keep others in check. Do you think Chirac, et al, will be bound by them? Riiiggghhhtt. Just like they adhere to the national debt limits |
| Posted by: Frank G 2005-05-10 09:49 |
| #2 The European love of regulation borders on the pathological. I saw it first-hand while doing some work for the International Electrotechnical Commission (IEC) years ago: the Euros-- and especially the French-- have a fascination with regulation for regulation's sake that is simply mind-boggling. They seem to follow some existential calculus that goes, "I regulate, therefore I am." |
| Posted by: Dave D. 2005-05-10 09:43 |
| #1 These sanctimonious idiots will have to cause lots of damage before their constituents will wake up and realize that centralized bureaucratic sanctimonious idiots got the Soviet Union to where it is today. |
| Posted by: Tom 2005-05-10 09:23 |