Wallström ‘green’ goods plan under US attack

Date: 06/09/01

By Peter Chapman

US firms have described European Commission plans to promote the sale of 'greener' products as a re-hash of failed policies that could seriously harm transatlantic trade.

The comments come as the Commission prepares to follow up a February green paper aimed at reducing environmental damage caused during the whole production cycle of goods, from extraction of raw materials to product use and disposal.

Its paper on integrated product policy (IPP) is spearheaded by Environment Commissioner Margot Wallström. "The products of the future would use less resources, have lower impacts on and risks to the environment and prevent waste generation but have a higher value to take into consideration citizens' concerns about health and environment," she said.

But in a letter to senior American officials including Trade Representative Robert Zoellick and Commerce Secretary Don Evans, the US Council for International Business (USCIB) - which represents more than 300 leading companies from General Electric to Ford, says Brussels must be told to re-think its blueprint before it becomes law.

USCIB president Thomas Niles said: "We are concerned that some of the proposed IPP policies are a re-treading of programmes that have been shown to be largely ineffective, and that could also disadvantage US companies doing business in and trading with European Union member states."

Wallström said the EU's goal would be achieved through reduced taxes for certain goods, state aid, incentives for public procurement of greener products and expanded eco-labelling indicating, for example, low energy consumption.

But Niles said: "Many of the green paper's proposals have already had questionable benefit to the environment or consumers, and could further create market distortions, affecting the competitiveness of both US and European companies and limiting consumer choice."

There should not be special treatment such as value added tax cuts for products that have environmental labels, he added.

He said some products not displaying eco-labels may actually be made in an "environmentally responsible or even superior manner" but do not indicate this simply because the companies had not applied for an eco-seal of approval.

The US group also fears that environmental criteria could override the economic and social value of products and warns that any IPP law must meet World Trade Organisation rules on procurement.

US firms have described European Commission plans to promote the sale of 'greener' products as a re-hash of failed policies that could seriously harm transatlantic trade.