Europe Plan on Chemicals Seen as Threat to U.S. Exports
By Elizabeth Becker and Jennifer 8 Lee

WASHINGTON, May 7 — The European Union announced a proposal today that would require manufacturers of industrial chemicals to test their products before they can be used, a change that the Bush administration said could threaten the $20 billion in chemicals that the United States exports to Europe each year.

Five years in the making, the proposal, which requires the approval of European governments and the European Parliament, would shift the burden to prove the safety of chemicals onto manufacturers instead of governments. The tests would be registered with a new agency. Under current rules, about 99 percent of the total volume of chemicals sold on the markets have not been subjected to testing requirements.

"There is no control whatsoever of the 400 million tons of chemicals sold in the European Union each year," said Margot Wallstrom, Europe's environment commissioner, at a news conference. "Our reform proposal therefore requires industry to provide public information on the chemicals they produce or import and the risks associated with their use."

The American chemical industry has lobbied hard against the proposal, criticizing it as excessive, bureaucratic and unnecessary.

"One of the basic problems with Europe's approach is that it needs all the information on all chemicals in order to make those decisions," said Mike Walls, senior counsel to the American Chemistry Council trade group. The European chemical industry has also criticized the proposal, though not as harshly.

The dispute follows a pattern of Europe's trying to impose stricter environmental rules, which the United States then labels as unnecessary, costly and potential trade barriers.

European officials said today that their proposed testing was aimed at improving public health and the environment at a time when health problems like allergies and male infertility are rising. The costs of cleaning up damage from chemicals like asbestos is already in the billions of dollars.

To the Bush administration, the proposal amounts to unsound science and an abuse of regulatory authority, complaints American officials have already leveled against Europe for its concern about genetically modified food and a plan to require that all such food, known as genetically modified organisms, be labeled to alert consumers.

"This is a big game; it will dwarf the G.M.O. dispute," said William Lash, assistant secretary of commerce for market access and compliance. "Any benefit they gain from these tests will be outstripped by the cost."

Some representatives of European environmental groups have labeled the proposal a disappointment. They said they had hoped the proposal would move faster and that it would include tougher safeguards, like an obligation for industry to stop using hazardous chemicals when a safer alternative is available.

"It comes down to one question: Do we want to phase out the chemicals that accumulate in wildlife and ourselves, and those that disrupt our hormones?" said Michael Warhurst of the World Wildlife Fund. "I believe that the European public does, and the European Commission is failing to get moving on this crucial task."

European officials stressed to critics that this was the beginning of a debate on how best to regulate chemicals. The 1,200-page plan was posted today on the union Web site, which invited comments.

But White House officials already have enlisted other trading partners in Latin America and Asia to oppose the European proposal. If enough changes are not made, the administration could consider challenging the rules before the World Trade Organization as a restraint on trade.

"We are concerned that this is potentially a trade barrier," said a senior trade official who spoke on the condition of anonymity. "This would have a huge extraterritorial effect here and in Asia, with Europe imposing its rules on everyone else."

Commerce officials are holding public meetings to organize industry opposition to the testing plan arguing that there must be a far cheaper way to protect the environment and public health. European officials said the chemical testing could cost at least $3 billion over 20 years.

The European Union is the world's largest chemical producer, accounting for about 28 percent of the world output. The industry, Europe's third largest in manufacturing, employs 1.7 million directly and some 3 million people indirectly.

Some experts say that the Europeans are too lax in their oversight.

"The European chemical industry understands that there is a need for a fundamental change," said Joel Tickner, a professor at the University of Massachusetts at Lowell. "It really has upset their colleagues in the United States."

Under the European proposal, manufacturers and importers of chemicals would be required to submit paperwork and tests documenting the safety of chemicals. The more hazardous chemicals and those used in the greatest volume would be subject to the greatest scrutiny.

In contrast, the main chemical regulation in the United States is the 1976 Toxic Substance Control Act, which has been widely criticized for being weak and too deferential to industry. The vast majority of nonpesticide chemicals are not subject to any required screening before introduction here.

The European chemical industry has tempered its criticism of the new proposal, focusing on the application of the tests rather than the premise.

"The initial white paper looked promising, balancing the social aspect, environment aspect and the economic aspect," said Marc Devisscher, a spokesman for Cefic, the European Chemical Industry Council. "We feel the environmental pillar is a little bit too dominant. It will end up in a huge bureaucracy."

The European Union also announced today that it had won approval from the World Trade Organization to impose duties worth $4 billion on American imports unless the United States repeals a law giving tax breaks to American exporters through foreign sales corporations.

Senator Charles E. Grassley, Republican of Iowa and chairman of the Finance Committee, said today that he was committed to passing legislation to avoid the penalties. Two representatives, Philip Crane, Republican of Illinois, and Charles B. Rangel, Democrat of New York, introduced a bill last month that they said would comply with the W.T.O. ruling.