Schnabel accuses EU of failure to test impact of rules on jobs

Date: 14/11/02

By Peter Chapman

ROCKWELL Schnabel, the United States ambassador to the European Union, has accused Brussels of launching too many new regulations, often without assessing their impact on business and jobs.

He said non-EU companies are frequently left out of the loop when decisions on important legislation are being plotted.

His comments follow last week's Transatlantic Business Dialogue in Chicago where US firms raised alarm over new EU chemicals regulations.

US management consultancy Arthur D Little warned they could cost up to three million American jobs.

'At some point you would hope they [the EU] would slow down the process of writing new rules and regulation that affect the economy,' said Schnabel.

'Of course you have to look at the safety of the consumer,' he continued, but this should not be 'at the expense of large numbers of people who all of a sudden lose their jobs'.

'You have to look at the overall picture of the effect of things. You can't simply say 'this we are going to do regardless of what impact it has' because you do a tremendous amount of damage to people's lives.'

The European Commission is currently preparing draft legislation on chemicals that is expected to include a requirement for businesses to retest up to 30,000 chemicals used in Europe to make sure they are safe.

A spokesman for Industry Commissioner Erkki Liikanen said proposals are likely to be unveiled before the end of the year.

But he insisted this would come only after completion of a full assessment of their likely effect.

However critics already warn that the rules - which cover thousands of products that have been sold for decades - would cost the chemicals industry nearly €2 trillion.

The US ambassador said the impact of the proposed chemical rules were not just creating shockwaves in the US.

'Apparently when [German Chancellor Gerhard] Schröder heard about that he called [Romano] Prodi [European Commission president] directly and started to complain.

'He said 'this is all good and well for the Commission to do something like this but have you considered what this means for the economy in Germany in particular and to the job market that is on the brink of recession?''

Schnabel said the chemical issue was the 'biggest' new regulatory issue on the US radar, although he said a trade war over the issue was unlikely.

This was partly because the US had learned to follow EU developments at an earlier stage than it did with issues such as approval for genetically modified organisms - where he said World Trade Organization action to force open EU markets for US products was an 'option'.

However, Schnabel claimed a lack of transparency was still a real problem for US firms trying to have a voice in the way EU rules are shaped - even though he admitted Prodi and Parliament President Pat Cox were 'cognisant of the problem'.

'If someone is writing or thinking of writing a new rule [in the US], everyone can participate in the process - it is wide open and the fact of the matter is here it is not wide open. Everyone can participate in the US but here it is much more controlled.'

He cited a recent conversation with a business manager of a large US-owned firm that has just been taken over by a European company.

Access to key EU decision-makers 'changed over night' after the Europeans bought the firm, he said.

'When I hear that, I shudder a little bit,' said Schnabel.

Rockwell Schnabel, the United States ambassador to the European Union, has accused Brussels of launching too many new regulations, often without assessing their impact on business and jobs.