Chinese Shoe And Leather Enterprises Will Face New EU Chemical Regulatory Challenges

Recently, the trade dispute between China and Europe has attracted wide media attention. However, few people have noticed that the EU's new regulations on chemical products will affect China's export of billions of Euro chemical products to Europe, and some SMEs may even be excluded from the EU market threshold.

The EU's new regulations on chemical products are officially called the European Union's licensing and restriction regulations for the registration of chemicals (REACH regulations). The EU began to formulate the regulation in 1998. The new regulations cover all aspects of chemical production, trade and safety. The aim is to establish a unified chemical monitoring and management system.

According to the REACH regulations, the EU will bring about 30 thousand chemical products and downstream textile and light industry pharmaceutical products into the EU's three management monitoring systems. The products that fail to be included in the management system can not be sold on the EU market.

At the same time, the regulations also set strict inspection standards, and the cost of testing is very high. All these expenses are borne by enterprises. According to the EU estimates, the basic cost of each chemical substance is about 85 thousand euros, and the cost of each new substance is 570 thousand euros.

Reporters recently learned from the European Parliament on the REACH regulations and the export recognition of chemical exports from developing countries. According to the statistics of 2002-2004 years, about 3 billion 700 million euro chemicals exported to the EU each year will be restricted by new regulations. That is to say, if the new regulations do not meet the requirements, China's exports to Europe may be reduced by 3 billion 700 million euros per year.

At present, some of China's chemical products exported to Europe are raw materials with low added value and relatively low pollution in the production process. The relevant information data of these products are incomplete or can not meet the technical standards of the European Union. Therefore, insiders estimate that after the implementation of the REACH regulations, China's chemical exports to Europe may decline, causing some Chinese enterprises to face operational difficulties.

Chinese diplomatic professionals point out that the REACH regulations will have the following effects on Chinese enterprises at least: the weakening of the competitiveness of chemical products and the impeding of exports; the increase in the cost of imported products from the EU, affecting the development of downstream related industries; the large scale petrochemical enterprises in China are facing severe challenges in opening up the European market. Therefore, Chinese enterprises should unite and rely on the overall strength to find the appropriate countermeasures.

Judging from the current situation, the impact of the new regulations is the biggest concern of the US business. The American Chamber of Commerce has formally proposed to the European Union the concern of the US chemical industry on this issue, and even said it would not rule out the EU's accuscation to the world trade organization, because some of the provisions of the new regulations were "technical barriers".

The EU Council of ministers reached an agreement on the REACH regulations at the end of 2005. At present, the law is entering the second instance of the European Parliament. In June this year, the EU Council of ministers will pass the new version of the statute and submit it to the European Parliament. In October this year, the European Parliament will vote on the statute and vote, and the law will be formally implemented in 2007.