Associations Going Global

With the onward march of globalisation, companies are often faced with a bewildering range of standards to which their products must conform. A preferable option is adherence to a consistent set of standards, even if they are the most exacting. Trade associations increasingly seek to follow this trend by becoming relevant actors in global-policy definition.

Background

Although officials worldwide are often loathe to admit it, the influence of European Union standards on global legislation can increasingly be identified. 

It is widely acknowledged that many American companies aim to meet EU standards rather than lose sales in Europe - frequently, associations based in the US advise member companies to follow the European standard as a benchmark. The EU, with 27 countries and 460 million people, surpasses even the US as a market, hence many companies redesign their products to come up to scratch in the EU. 

Issues

European directives may well be exacting, but companies such as Revlon and Estée Lauder have indicated that they prefer their products to meet a wide-ranging 'EU standard', no matter how tough, rather than deal with differing international approaches. Hence, the reason why EU policies tend to 'migrate'.

It is in this area that the assistance of associations, which typically comprise several companies as members, has become increasingly relevant. According to Rockwell Schnabel, the former US ambassador to Brussels, Europe is "increasingly seeking to act as the world's economic regulator".

   
America

US state California has traditionally been at the forefront of strict environmental legislation and continues to fulfill this role. According to EU Affairs Associate Tybee Kiejdan of public affairs consultancy Cabinet Stewart, state government and legislators closely monitor the development of EU legislation - there are a number of examples that show that important elements of these laws have found their way into California, or at least have been inspired by it. In addition, other "more progressive" states in the US (such as Oregon, Washington, and New England) sometimes follow California’s lead.

California recently became the first state to ban flame retardants, which are suspected of contributing to learning disorders, attention deficit and hyperactivity in children in 2003. This was in the wake of a similar ban in the European Union that year, prompted by a Swedish study that reported the levels of the chemicals in breast milk in Sweden had increased forty-fold from 1972 to 1997. At the time, China and South Korea were also considering the bans. 

Green Chemistry in California: A Framework for Leadership in Chemicals Policy and Innovation  is the most recent publication of California's Policy Research Center   (CPRC) at the University of California. The report suggests that developments in the European Union are driving interest in cleaner technologies, including green chemistry, and are expected to lead a long-term EU competitive advantage in this arena. It mainly focuses on the EU Restriction of Hazardous Substances in Electrical and Electronic Equipment (RoHS), e-waste (WEEE), and chemicals (REACH). Other examples include: 

  • The Toxics Use Reduction Institute (TURI) at the University of Massachusetts Lowell has helped a cleaning supply company (Surface Solutions Laboratory) receive the first European Union Eco-label in North America for an all-purpose cleaner. The voluntary label is designed to encourage businesses to market products and services that are kinder to the environment and help European consumers – both public and private purchasers – to easily identify them. 
  • Massachusetts' Toxics Use Reduction Act (TURA) is now positioning industries to compete more strongly in the global market because of the chemical restrictions imposed on their products in the European Union and Japan. For example, TURI has established the Wire and Cable Supply Chain Initiative that brings together raw material suppliers, compounders, extruders and manufacturers to develop lead-free wire and cable that will meet the strict requirements of the EU and Japan. 

Asia

European environmental and safety rules conceived in Brussels are increasingly becoming de-facto Asian standards on the factory floors that manufacture televisions, clothing, and furniture. For example, when the European Commission announced a ban on a certain class of azo dyes in 2003, once widely used for textiles, thousands of factories in Asia retooled at a significant cost.  

The US may buy a slightly larger share of Asian exports each year, but Europe's presence is felt more strongly on the ground. European inspectors can be seen in warehouses throughout Asia testing more than 1,000 products per day (such as food, electronics, children’s toys, and clothing) for European standards that will be exported. These measures are linked to regulations such as the EU Directive 2002/95EC, which prohibits the use of hazardous substances in electronic equipment and the EEC EN71, a set of safety regulations for children’s toys.

Positions

EU Public Affairs consultancy 
Cabinet Stewart
's EU Affairs Associate, Tybee Kiejdan, told EURACTIV: "Not doing business with Europe is an unattractive option for US companies. The size of the European Union’s market has lifted the profile of its regulations and standards, replacing the role that the United States used to have in this respect. 

"The use of European legislation and standards around the world suggests a growing level of interdependence that could further facilitate trade between those jurisdictions accepting these standards as their own but exclude countries that do not.  The European Union's regulatory clout is particularly visible in the areas of automotive emissions and safety requirements, chemicals, electronics and the environment.

"Senior officials in Washington see the EU as an entity that will use its economic weight to impose European values on the rest of the world, often through excessive regulation. 

Consultants at Kellen Europe have pointed to initial complications for national associations in the EU-12 with education and training needed to adapt to the EU's complex regulatory environment. But, in the end, Kellen believes associations will benefit from increased economic activity and EU funding.

According to Honeywell
Government Relations Manager Europe Michelle O'Neill: "We see the emergence of many new regulations in China in the environmental arena, which mirror EU legislation.  One example is China RoHS, similar to the EU's Restriction of Hazardous Substances directive.  

American Electronics Association Europe Managing Director James Lovegrove  told EURACTIV: "Complying with the strictest requirements is not enough.  An official from a non-EU country does not need to pay any attention to whether the product is good enough for Europe or not.  The result is a significant investment in compliance sometimes without any particular guarantee of success  - I would argue that this money/resource could otherwise be available for R&D and even for producing the next generation of cutting- edge green product.  A careful balance must be struck when straitjacketing innovators. 

"Although non-EU countries have no obligation to 'copy and paste' EU law, we do encourage them to work with us as well as each other to iron out unnecessary difference between the various initiatives.  Climate change is a ticking bomb and we do not have resources nor time to waste. 

"Ever-stricter EU rulings have certainly sent ripples of regulatory activity around the globe - such as substance bans, take-back requirements and energy-efficient requirements.

"No one questions the importance of addressing such environmental challenges.  However, there is a risk that this trend results in an unco-ordinated patchwork of initiatives. This gives rise to significant concern in terms of workability and ultimately whether the global environment is best served." 

 

Further Reading

Subscribe to our newsletters

Subscribe