More than 30,000 chemical products and more than 5 million downstream products will be included in the monitoring system. Effective June 1, 2008, all chemical substances that export to the European Union supplier more than one ton each year must be pre-registered in the European Union. By December 31, 2008, no pre-registered chemicals will enter the European market. This is a signal that was recently transmitted by the project team composed of the EU, ASEAN, etc., in Nanjing to hold the "China Small and Medium-sized Enterprises' Ability to Responsible for the REACH Order." As one of the European Union's technical assistance to China, this seminar taught SMEs how to minimize trade distortions caused by the REACH decree. However, due to the influence of the REACH decree, the export prospects of Chinese chemicals are not optimistic.
China-EU Chemicals Imports and Exports Will Decline by 10%
What is the REACH decree brought to China? According to Secretary Ding Dong of the Department of Foreign Trade and Economic Cooperation of Jiangsu Province, the REACH decree will bring to China a test of a 10% drop in the total import and export of China-EU chemicals and a 0.4% drop in China's chemical production value, and it may lead to 200,000 chemical industries. And related practitioners are unemployed. Secretary Ding used the term “test for life and death†to describe the challenges faced by China’s chemical exports and expressed “worryâ€.
On June 1, 2007, the EU REACH regulation took effect. The REACH regulation is called the "Registration, Evaluation, Authorization, and Restriction of Chemicals Act." It will replace more than 40 EU directives and regulations on hazardous substances such as the Classification, Packaging and Labelling of Hazardous Substances, and require mandatory registration, evaluation and licensing of all chemicals on the EU market and access to the EU market and the implementation of safety monitor. REACH has incorporated more than 5 million finished products in the EU market, including about 30,000 chemical products and its downstream textile, light industry and pharmaceutical products, into three management and monitoring systems for registration, evaluation and licensing. All the chemicals produced by the EU itself for export and imported from abroad and its downstream products must be registered and licensed before they can be circulated in the EU market. It will involve about 30,000 chemical products in the EU market, affecting more than 90% of the trade volume between China and Europe.
As all the costs of material inspection and registration are borne by the company, it is conservatively estimated that the cost that companies in China are required to pay for REACH each year will be 500 million to 1 billion US dollars.
Zhao Yanxia, ​​head of the World Trade Organization Division of the Ministry of Commerce, stated that the EU REACH regulation is the biggest trade barrier after China's accession to WTO. In response to the REACH Decree, enterprises in developed countries are still struggling, not to mention Chinese companies with weaker control over the safety of chemical production.
SMEs urgently need to improve their ability to respond. It has been pushed by the REACH decree not only to small and medium-sized chemical companies, but also to textiles, light industry, and pharmaceutical companies downstream of the supply chain. Almost all chemical products exported will be registered and authorized before they can be circulated on the European market. According to the European Chemicals Agency's Erikvanplassche, in principle, non-EU producers have no direct obligations, but importers need to assume corresponding obligations, that is, Chinese manufacturers must provide importers with relevant information on chemical substances and undertake corresponding cost. Exporters of self-exported products may entrust “only agencyâ€. He reminded Chinese companies that in order to enjoy preferential treatment during the transition period, companies must entrust importers or agencies to pre-register. Don't miss the December 31 deadline. The REACH decree itself also offers preferential treatment for small and medium-sized enterprises. Medium-sized enterprises charge 70% of the general standard, small-scale enterprises charge 40% of the general standard, and microenterprises have 10%.
The majority of SMEs are still waiting and watching. Zhou Chun, director of the China Minmetals Chemicals Import and Export Chamber of Commerce, revealed that more than 90% of SMEs surveyed have low awareness of REACH and most SMEs do not know how to respond. Some SMEs believe that the laws and regulations are not related to their own, but in fact, as long as the relevant products they produce are exported to the EU, they are related to the company; some companies think that the REACH regulations only require EU importers and downstream users to worry about. The actual situation is, Importers and downstream users will not assume relevant responsibilities. Importers can change their purchasing channels. The real risks are Chinese companies.
To improve the awareness of prevention and risk aversion, and actively respond to the EU REACH decree, Chinese SMEs have no time to delay. Magnus Gislev, the first secretary of the EU Delegation to China, said that all stakeholders involved in the export of chemicals to the EU must understand REACH. However, in an interview with this reporter, he held a different attitude toward the statement that "REACH decree is China's largest trade barrier after joining WTO." He believes that: "The REACH decree is not aimed at a country's foreign trade, but for the sustainable development of the environment and human health. REACH has a similar impact on the EU and chemical companies in China, Japan, the United States and other countries."
China-EU Chemicals Imports and Exports Will Decline by 10%
What is the REACH decree brought to China? According to Secretary Ding Dong of the Department of Foreign Trade and Economic Cooperation of Jiangsu Province, the REACH decree will bring to China a test of a 10% drop in the total import and export of China-EU chemicals and a 0.4% drop in China's chemical production value, and it may lead to 200,000 chemical industries. And related practitioners are unemployed. Secretary Ding used the term “test for life and death†to describe the challenges faced by China’s chemical exports and expressed “worryâ€.
On June 1, 2007, the EU REACH regulation took effect. The REACH regulation is called the "Registration, Evaluation, Authorization, and Restriction of Chemicals Act." It will replace more than 40 EU directives and regulations on hazardous substances such as the Classification, Packaging and Labelling of Hazardous Substances, and require mandatory registration, evaluation and licensing of all chemicals on the EU market and access to the EU market and the implementation of safety monitor. REACH has incorporated more than 5 million finished products in the EU market, including about 30,000 chemical products and its downstream textile, light industry and pharmaceutical products, into three management and monitoring systems for registration, evaluation and licensing. All the chemicals produced by the EU itself for export and imported from abroad and its downstream products must be registered and licensed before they can be circulated in the EU market. It will involve about 30,000 chemical products in the EU market, affecting more than 90% of the trade volume between China and Europe.
As all the costs of material inspection and registration are borne by the company, it is conservatively estimated that the cost that companies in China are required to pay for REACH each year will be 500 million to 1 billion US dollars.
Zhao Yanxia, ​​head of the World Trade Organization Division of the Ministry of Commerce, stated that the EU REACH regulation is the biggest trade barrier after China's accession to WTO. In response to the REACH Decree, enterprises in developed countries are still struggling, not to mention Chinese companies with weaker control over the safety of chemical production.
SMEs urgently need to improve their ability to respond. It has been pushed by the REACH decree not only to small and medium-sized chemical companies, but also to textiles, light industry, and pharmaceutical companies downstream of the supply chain. Almost all chemical products exported will be registered and authorized before they can be circulated on the European market. According to the European Chemicals Agency's Erikvanplassche, in principle, non-EU producers have no direct obligations, but importers need to assume corresponding obligations, that is, Chinese manufacturers must provide importers with relevant information on chemical substances and undertake corresponding cost. Exporters of self-exported products may entrust “only agencyâ€. He reminded Chinese companies that in order to enjoy preferential treatment during the transition period, companies must entrust importers or agencies to pre-register. Don't miss the December 31 deadline. The REACH decree itself also offers preferential treatment for small and medium-sized enterprises. Medium-sized enterprises charge 70% of the general standard, small-scale enterprises charge 40% of the general standard, and microenterprises have 10%.
The majority of SMEs are still waiting and watching. Zhou Chun, director of the China Minmetals Chemicals Import and Export Chamber of Commerce, revealed that more than 90% of SMEs surveyed have low awareness of REACH and most SMEs do not know how to respond. Some SMEs believe that the laws and regulations are not related to their own, but in fact, as long as the relevant products they produce are exported to the EU, they are related to the company; some companies think that the REACH regulations only require EU importers and downstream users to worry about. The actual situation is, Importers and downstream users will not assume relevant responsibilities. Importers can change their purchasing channels. The real risks are Chinese companies.
To improve the awareness of prevention and risk aversion, and actively respond to the EU REACH decree, Chinese SMEs have no time to delay. Magnus Gislev, the first secretary of the EU Delegation to China, said that all stakeholders involved in the export of chemicals to the EU must understand REACH. However, in an interview with this reporter, he held a different attitude toward the statement that "REACH decree is China's largest trade barrier after joining WTO." He believes that: "The REACH decree is not aimed at a country's foreign trade, but for the sustainable development of the environment and human health. REACH has a similar impact on the EU and chemical companies in China, Japan, the United States and other countries."
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