New Power for 'Old Europe'
by Mark Shapiro
The Nation magazine, December
The Bush Administration has interpreted
its victory in the 2004 election as a mandate to take its free-market
policies to further extremes. It is signaling its determination
to unhinge US industry from what remains of regulations limiting
the poisons in our water, our bodies and our air. But while they
are newly emboldened at home, the Administration and its corporate
allies are looking warily across the Atlantic to Brussels. Here,
in the capital of the European Union, an unprecedented challenge
to longstanding practices of American industry is unfolding.
Since the fall of the Berlin wall, the
European Union has been steadily transforming itself from a facilitator
of trade to a sophisticated geopolitical power with the teeth
to back up its policies - an evolution that has occurred largely
under the American public's radar. Over the past decade, EU member
states have ceded governing and enforcement authority to Brussels
in areas ranging from environmental regulation to food safety,
accounting standards, telecommunications policy and oversight
of corporate mergers. As a result, US companies that do business
in Europe-which remains America's largest export market-are quickly
learning that "old Europe" is now wielding new world
Just this year, US manufacturers of such
goods as chemicals, cars and cosmetics have been confronted with
EU regulations that force a choice: Either conform to the EU's
standards of preemptive screening for toxicity-far tougher than
US standards or risk sacrificing the European market, which, with
450 million people, is now larger than that of the United States.
In the process, the European Union is challenging US presumptions
of unilateral decision-making on issues with tremendous consequences
for American companies and consumers, treading on ground that
has long been considered sacred turf.
"Americans are in for a rude shock,"
says Clyde Prestowitz, a former Reagan Commerce Department official
and author of Rogue Nation. American Unilateralism and the Failure
of Good Intentions. "Other players are establishing their
own standards, and they have the muscle to make them stick. We
are headed into a new era."
REACH and Ye Shall Find
Last summer, while Americans were focused
on the worsening crisis in Iraq and the intensifying presidential
campaign, the US chemical industry was consumed by plans at the
EU'S Environment Commission to complete the details of a proposed
regulation known as REACH-Registration, Evaluation and Authorization
of Chemicals. For the $500 billion chemical industry, REACH threatens
a revolution in chemical regulation-upending decades-long practices
that were pioneered in the United States.
In 1976 the US Congress passed the Toxic
Substances Control Act, which required chemicals introduced after
the law took effect in 1979 to be tested before being registered
for use. The problem with TSCA-or what critics call the "Toxic
Substances Conversation Act"-is that 80 percent of the chemicals
on the market today were introduced before 1979. But Europe at
that time followed the US model, so in effect TSCA established
the global standard. No more. REACH is the first effort to secure
environmental data on some 30,000 chemicals that have been on
the market in the United States and around the world without any
significant testing of their toxicity on human health and the
These include an array of highly toxic
substances that were effectively grandfathered into the market
by TSCA, including industrial solvents like ethyl benzene, known
to cause nerve damage; heavy metals like cadmium, an ingredient
in many paints and industrial ceramics that can cause kidney failure;
and a family of plastic byproducts, called furans, that are potent
carcinogens and endocrine disrupters. Many of these chemicals
have already been found in high concentration in the blood of
Americans and Europeans; during a World Health Organization convention
in Budapest last June, the World Wildlife Fund International revealed
forty-four different hazardous chemicals in the bloodstream of
top EU officials, including then-Environment Commissioner Margot
Wallstrom, now the vice president of communications for the European
Commission, the executive arm of the EU.
The proposed regulations, according to
Robert Donkers, one of the authors of REACH and now posted in
Washington as environment counselor for the European Commission's
US delegation, evolved out of the realization that little was
known about chemicals contained in a vast array of consumer products.
"There was great political anxiety in Europe when we discovered
that carcinogenic chemicals were being released from consumer
products like diapers and softeners in baby toys. We discovered
that neither consumers nor the government was informed about the
chemical properties of what is in those and other products and
how they break down. An overhaul was needed."
Under REACH, chemicals determined to be
"carcinogens, mutagens or reproductive] toxins" would
have to be taken off the market within a decade. According to
the EPA's own standards, this could amount to as many as 1,400
chemicals. For other chemicals, REACH establishes several layers
of testing for toxicity-with strictures that grow tougher as the
quantity and risk increases. The proscriptions also apply to chemicals
in manufactured goods: REACH encourages substitutions for chemicals
that pose "potentially serious or irreversible threats"
to human health. A new European Chemicals Agency would administer
the program from Helsinki.
The REACH directive represents an upheaval
in the basic philosophy of chemical regulation, flipping the American
presumption of "innocent until proven guilty" on its
head by placing the burden of proof on manufacturers to prove
chemicals are safe-what is known as the "precautionary principle."
REACH adds extra bite with a requirement that toxicity data be
posted publicly on the new agency's website. Thus, test results
that were once tightly held by chemical companies will suddenly
be available to citizens and regulators across the globe. That
prospect foreshadows trouble for US chemical producers.
"The chemical industry is scared
that the American people might not want to be second-class world
citizens," says Charlotte Brody, executive director of Health
Care Without Harm, a Washington, DC-based coalition of healthcare
professionals. "If people in Europe have chemicals in their
toys that are not dangerous, maybe we don't want those same chemicals
for our kids." With REACH, the Europeans hit a powerful nerve.
The chemical industry launched an intensive lobbying campaign,
conducted in parallel with the Bush Administration, to derail
the proposed directive before it becomes law.
In late January, when Defense Secretary
Donald Rumsfeld issued his now-famous slight of our European allies
as "the old Europe," inside the State Department "old
Europe" was causing panic: A draft position paper circulating
inside Foggy Bottom expressed alarm at the evolving REACH proposal.
By early March, the State Department sponsored a visit by Dow
Chemical executives to Athens to lobby the Greeks-who at that
time occupied the EU presidency-to oppose REACH. On April 29,
Secretary of State Cohn Powell sent out a seven-page cable to
US embassies in all the EU member states claiming that REACH "could
present obstacles to trade and innovation" and cost US chemical
producers tens of billions of dollars in lost exports. The cable
stated that REACH's precautionary principle was "problematic"-striking
at the heart of the difference between the US and European regulatory
approaches toward potential environmental hazards.
The State Department's tone and apocalyptic
predictions that REACH could adversely affect "the majority
of U.S. goods exported to the EU" (over $150 billion last
year) mirrored the position papers of the industry's main lobbying
organization, the American Chemical Council, on REACH. The State
Department claimed that REACH would be "unworkable in its
implementation, [would] disrupt global trade, and adversely impact
innovation." In June US Trade Representative Robert Zoellick
reiterated that argument in a submission to the World Trade Organization's
Technical Barriers to Trade
Committee in Geneva.
Those assertions have been vigorously
disputed by the EU. In October the EU claimed in a countersubmission
to the WTO that the costs of implementing REACH over the next
eleven to fifteen years could total $3.5-$6.5 billion, but that
those costs would be offset over time by profits generated from
safer alternatives-and compare favorably to the $60 billion it
estimates would be saved in chemical-related health costs alone
over the next three decades.
Zoellick's objections to REACH prompted
Senators Frank Lautenberg and James Jeffords to request that he
provide details about who the Administration consulted before
issuing its position to the -WTO. "We are troubled,"
the senators wrote Zoellick on October 19, "by reports that
the Administration fashioned its position on REACH to reflect
unsubstantiated cost concerns raised by a narrow, segment of U.S.
industry, without any genuine consideration of the likely health
and environmental benefits that such policies would generate."
Thus far there has been no response to their queries.
EU officials I spoke with describe practically
weekly visits from delegations representing the Commerce Department,
the US Trade Representative, the State Department and/or the American
Chemical Council. In April, then-Environment Commissioner Wallstrom
complained to a meeting of EU and EPA officials in Charlottesville,
Virginia, that REACH had been subject to "enormous interest
and lobbying," but she insisted that the "consensus"
for reform of the current system remains strong. The lobbying
continues: In October the US mission to the EU sent out a joint
appeal with the Australian mission to the EU missions of Canada,
Japan and other Asian nations to attend a meeting to develop a
"coordinated outreach" strategy among "EU trading
partners" on REACH. Members of the European Parliament (MEPs)
were invited to meetings with the US- and Australian-orchestrated
delegations so the latter could communicate their opposition to
REACH-an extraordinary intrusion of the United States into a debate
over internal EU policy.
Never before has an EU proposal drawn
fire from such heavy guns. The US chemical industry, like other
American industries, has been discovering that a presence in Brussels
is now a must, and has had to learn new ways to exert influence
in a governing institution with three chambers, twenty-five countries
and twenty national languages, and in which the usual cocktail
of campaign contributions, arm-twisting and seduction are neither
warmly received nor, in the case of campaign contributions, legal.
"We've certainly had to learn a lot about a new parliament,
new procedures, new political parties," says Joe Mayhew,
senior adviser to the American Chemical Council.
The lobbying campaign has largely backfired.
Its primary effect has been to delay a final vote on REACH in
the European Parliament from February to the middle of next year
at the earliest. But there is little doubt it will pass-almost
a decade in the making, support for REACH in the Parliament stretches
broadly across party lines. "It is not a question of if but
when," says the EUs Robert Donkers. Hearings will commence
in the Parliament on January 19. The current Dutch president of
the EU has committed to forging political agreements around REACH
for consideration by the Council of Ministers before the hearings
The fact that policies emanating from
Brussels now ] threaten longstanding American industrial practices
is a sign of how profoundly transAtlantic relations are shifting.
"We used to have to deal with individual
countries," comments Mayhew of the American Chemical Council.
"We'd pay attention to, say, France. Not to be pejorative
here, but we wouldn't really pay much attention to what Spain
was doing. Having the EU as a single bloc with regulatory authority
is a new thing for us."
A Makeover for the Cosmetics Industry
Every morning across America, tens of
millions of women apply to themselves an average of nine "personal
care" products. From tubes and bottles and delicate brushes
come the tools of beauty and self-preservation known as cosmetics.
Users of these products might assume that somebody is watching
to insure that potentially toxic ingredients are kept away from
intimate contact with their body. They would be wrong. Neither
the Food and Drug Administration nor any other government agency
regulates ingredients used in the preparation of cosmetics. The
Food, Drugs and Cosmetics Act of 1938 established extraordinarily
lax standards for the regulation of cosmetic ingredients. But
earlier this year, when the Environmental Working Group compared
the ingredients in 7,400 personal care products with potentially
hazardous chemicals identified by the Centers for Disease Control
and other leading medical institutions, dozens of varieties of
skin and tanning lotions, nail polish, mascara and other personal
care products were found to contain known and suspected carcinogenic,
mutagenic and endocrine disrupting chemicals.
The improvisational nature of the cosmetics
industry is about to change. EU member states submitted plans
to the European Commission to institute new guidelines established
by what's known as the "Cosmetics Directive," which
takes effect this coming February. The directive calls for the
removal of ingredients suspected of causing "harm to human
health" from cosmetics and personal care products in Europe.
The effects of that directive are being felt around the world.
The main regulatory body for cosmetics
in the United States is the industry itself, represented by the
Cosmetic, Toiletry and Fragrance Association (CTFA). What that
means, in effect,, is that several times a year a Cosmetic Ingredient
Review board (CIR)-made up of toxicologists drawn primarily from
universities and paid for by the CTFA-reviews the existing literature
on ingredients and makes recommendations to the industry. There
is nothing that requires any member company to respond to the
board's safety or health recommendations.
Over the past three years the review board
suggested that at least nineteen ingredients be removed from personal
care products-including coal tar, a hair dye linked to high rates
of bladder cancer among hairdressers; sodium borate, sometimes
called boric acid, which has been linked to testicular development
problems and is included in Desitin diaper rash ointment for infants,
and which the CIR recommended "should not be used on infant
or injured skin"; iodopropynyl butylcarbamate, a mutagen
in animal testing included in a South Beach tanning spray that
the CIR recommended "not be used in products intended to
be aerosolized"; and ethoxyethanol acetate in nail polish,
which the CIR stated is "unsafe for use in cosmetic products."
The FDA has done nothing to mandate removal
of these or legions of other potentially dangerous ingredients,
according to the Environmental Working Group.
Last spring the Safe Cosmetics Campaign,
a group of women's and environmental health NGOs sent an appeal
to some 250 firms that sell personal care products in the United
States, asking that they conform to the health requirements of
the EUs Cosmetics Directive as well as take other actions to insure
more stringent controls over potentially toxic ingredients. Of
those, the campaign heard from sixty-five companies; responses
ranged from resistance to accommodation. Revlon and Estee Lauder
replied by citing the CTFA'S official response to the EU: On March
25, CTFA stated that the directive "represents an unnecessary
change in the philosophy of regulation of cosmetic ingredients
in the EU."
Other major producers, like L'Oreal, Liz
Claiborne and Gillette, responded that they were already beginning
the process of reformulating their products to conform to the
requirements of the Directive; the Gap and Alberto Culver indicated
that they would do so if they discovered ingredients within the
EU's range of health concerns. Natural product companies, like
Aveda, Custom Aesthetics and numerous small firms, claimed they
were already in compliance. Several of the largest companies,
like Unilever, have yet to respond, while Procter & Gamble
insisted to the campaign that it would continue its policy of
formulating products on a market-by-market basis. After the Safe
Cosmetics Campaign began running a newspaper ad in the fall about
the potential health dangers from cosmetics, Revlon shifted gears,
indicating its willingness to abide by the EU's new strict rules.
"We are asking companies to be accountable
for the safety of their cosmetics," says Janet Nudelman,
program director of the Breast Cancer Fund. To accomplish that
goal, public health advocates looked not to Washington but to
Brussels-where the EU is now a force that enjoys transatlantic
reach and is far tougher than our own FDA.
A Car's Life
Jean Tinguely was a Swiss sculptor renowned
for his grand mechanical creations, huge machines full of whirring
wheels and gears that were designed to self-destruct. His works,
widely dispersed through Europe's finer art institutions-and showing
up more rarely in the United States-evoke a kind of grinding perfection,
a speed-up of what is built into every mechanical device: its
own death. Much like the automobile, which may purr steadily for
ten or twenty years or even longer. But ultimately those gears
and crankshafts, like a Tinguely machine, will fail, and the automobile
will die. Then what happens?
Every year aging cars, left to decay in
scrapyards or fields or suburban driveways, create more than 15
million tons of waste across the United States and Europe. Many
components in those autos contain toxic ingredients, including
metals like lead, mercury, chromium and cadmium, which are known
to induce problems such as nerve damage and cancer in laboratory
animals. The plastic in the seats and dashboards never biodegrades.
Cars and their component parts are left to despoil the landscape,
leach into the soil and poison groundwater. There is nothing to
Across the Atlantic, the EU has implemented
a program with the oddly philosophical title "End of Life
Vehicles Directive." Starting in 2006, all cars produced
or sold in the EU must be built with at least 85 percent recyclable
components; by 2015 that figure rises to 95 percent. The directive
also bans toxic heavy metals like cadmium and requires that manufacturers
take responsibility for disposing of their cars. According to
the European Commission's administrator for the vehicles program,
Rosalinde van der Vlies, European, Japanese and Korean car manufacturers
are already beginning to adapt their production processes in anticipation
of the new requirements.
For US car manufacturers the directive
presents a historic challenge. American car companies export virtually
no cars to Europe; thus US manufacturers are under little direct
pressure to adapt to European standards. But each of the US Big
Three has substantial ties to the European market: Ford has its
own Ford Europe production facilities and owns the Jaguar line
in Britain. General Motors owns the German Opel, the Swedish Saab
and produces its own line of vehicles in Britain under the Vauxhall
label. DaimlerChrysler is owned by the German manufacturer Daimler-Benz.
Glenn Mercer, an auto industry analyst
for the consulting firm McKinsey & Company, says there is
no sign of these reforms' being instituted by either US parent
or subsidiary companies, nor is a serious effort being made to
develop alternatives to the toxic chemicals included in American
cars. The concept of being responsible for the ultimate disposal
of those cars has been received in this country like a message
from another planet.
Mercer comments: "Every time you
drive a car you've made a decision to pollute. With every car,
you have the decision: Do you dispose of it in a controlled setting,
as required by the European Union? Do you find alternatives to
the chemicals and take the hit on sales that may result from a
higher price? Or do you leave them in your car, and have them
dispose themselves into the environment over fifteen years?"
Thus far, the United States has been taking the latter approach-dual
production according to dueling standards.
At the core of the EU'S regulatory approach
is what van der Vlies calls "life cycle analysis": assessing
the actual costs over the lifetime of consumer products, from
their creation to their demise. The End of Life Vehicles Directive
is intended to insure that those costs are shared by the manufacturer-while
providing a powerful incentive to develop more sustainable alternatives.
Every European diplomat I spoke with was
careful to insist that Europe's new generation of environmental
directives is not intended to "impose" Europe's will
upon the United States. Camilo Barcia Garcia-Villamil, the Spanish
consul in San Francisco, who spent fifteen years working with
the EU in Brussels, comments: "The European Union now has
increased decision-making capacity. And if American companies
want to be active in the European market, they must take account
of European rules. We are not imposing our standards. We are making
foreign companies respect our standards when they are in Europe."
This is diplomatic language that is new in the context of transatlantic
relations-though its inverted formulation would be quite familiar
to generations of postwar American policy-makers.
"Economically, Europe stands toe
to toe with the United States," says Clyde Prestowitz, now
head of the Economic Strategy Institute in Washington. "We
can't dictate to it any longer. We have to negotiate."
The New Power of 'Old Europe'
When Henry Kissinger was Secretary of
State for President Ford in 1977, he famously asked in frustration,
"What telephone number do you dial to reach Europe?"
Today, the area code for that number is clear: 32-2, for Brussels,
which has been transformed from the provincial capital of a small
European country into an international metropolis bustling with
a multilingual, highly educated EU workforce drawn from across
The European Union has its roots in a
simple "coal and steel pact" signed between France and
Germany in 1951 to facilitate trade in those critical commodities
to aid in postwar reconstruction. Over the subsequent decades
of the cold war, an integrated Europe was supported by the United
States as a restraint on Germany's resurgence and a critical Western
bulwark, against the expansion of the Soviet Union.
The pact would later evolve into the Common
Market and, finally, into the political and economic powerhouse
of today's European Union. For the first time in history, a superpower
has emerged that is not based on nationalistic ambitions or military
power but upon a voluntary submission of national aspirations
to a transnational authority. Its architects were well aware of
the EU's departure from the usual march of political history:
Jacques Delors, the visionary European Commission president from
1985 to 1994, used to refer lightheartedly to the evolving Union
as an "Unidentified Political Object."
On foreign affairs, Europeans continue
to have trouble speaking with one voice-as the divisions in Europe
over the US invasion of Iraq showed. But on domestic matters,
the EU speaks for Europe-and it is those initiatives, emanating
from Brussels, that are sending powerful messages across the Atlantic.
"In Europe today, we are seeing a focal point of regulatory
action other than the United States that, for the first time in
the postwar period, is driving world markets," says David
Wirth, a trade law specialist who negotiated the Montreal Protocol
on ozone depletion on behalf of the United States and is currently
director of international studies at Boston College Law School.
Indeed, a broad spectrum of American industry
has already felt the potency that comes from an integrated market
and differing standards of environmental and consumer protection.
Microsoft, for example, was fined $497 million earlier this year
by the EU for its "anti-competitive practices," and
General Electric's long-planned takeover of Honeywell was skewered
in 2002 by the EU's Competition Commission, which has now emerged
as a critical first stop by corporations en route to a merger.
"It used to be," comments Amelia Torres, spokeswoman
for the Competition Commission, "that the EU would be the
last part of any deal. Now they know they have to come here first."
The agribusiness company Monsanto became accustomed to contentious
forays into Brussels while struggling to obtain EU acceptance
of its genetically engineered seeds.
EU politics are a complicated business;
the Parliament is as tumultuous a democratic body as any. The
recent controversy over the nomination of a new European justice
commissioner with extreme views on women and homosexuals illustrated
some of the social and political frictions that continue to divide
Europeans, a passing storm to which much of the American media
responded with smug condescension. These developments came on
the heels of a European parliamentary election last June that
drastically changed the composition of the legislature: Ten new
member countries, most from the orbit of the former Soviet Union,
sent delegations to the Parliament; 50 percent of the MEPs who
won election had never before served in Brussels. But these changes
show little sign of derailing the regulatory policies that are
now embedded in the EU's machinery of government.
Now that Europe has a phone number, US
ardor for integration has begun to cool. "The White House
is questioning whether it's a good idea for Europe to be speaking
with one voice," says Fraser Cameron, who served with the
European Commission's delegation to Washington until 2002 and
is now director of studies at the European Policy Center in Brussels.
Cameron points out that the United States
and the European Union remain each other's most significant trading
partners in the world-our entanglements are deep and abiding.
But as Europe becomes a more assertive political force, the question
will become, as he puts it, "Why shouldn't Americans enjoy
the same standards as Europeans?"
Such a basic question used to run in the
other direction, when the United States set the gold standard
for the world's environmental health. And the answer strikes at
the core of the Bush Administration's most savored narratives-that
we, alone, are masters of our nation's fate.
Mark Schapiro is editorial director of
the Center for Investigative Reporting.