Taiwanese exporters may face higher production costs if the EU goes forward with a plan to require companies to conduct toxicity testing and risk assessments to prove their products can be safely sold in the EU market, the Board of Foreign Trade said yesterday.
"An estimated cost of between US$250,000 to US$300,000 for each test on every new chemical substance will create a serious financial burden on small companies," a board official who declined to be named, said.
According to the official, a plan for registering, testing and labeling chemical substances within the EU, which absorbed about 36 percent of the world's total chemical production last year, won endorsement from European Parliament in February 2001.
The EU may draft a bill by the end of this year. The new regulation will have an impact on local exporters of plastics, computers, semiconductors, machinery, textiles and food-processing equipment.
The EU's new chemical-control regulation, called REACH (registration, evaluation and authorization of chemicals), is aimed at phasing out hazardous chemical substances.
More red tape
The proposed regulation requests companies to register chemicals, undergo an evaluation on the effect of long-term exposure for all substances exceeding a production volume of 100 tonnes and obtain authorization for chemicals that are hazardous to the natural environment and human health.
Taiwan exported US$16.48 billion worth of products to European countries during the first nine months of this year, the board said.
Testing for every new substance will cost between US$250,000 and US$325,000 while the testing for every existing substance will cost around US$85,000.
"This is just another way for the EU to protect its own industries," the official said.
Jack Hsieh (謝俊雄), executive manager of Taiwan's Petrochemical Industry Association (石化公會), said the regulation may also infringe on intellectual property rights.
"To request manufacturers to list the substances of products in detail by the EU will breach the companies' trade secrets," he said.
Hsieh also predicted that the US and Japan, the world's second and third-largest chemical producers, accounting for 25 percent and 10 percent, respectively, have already voiced strong opposition to the plan in August.
The board will be paying close attention to the issue and the Ministry of Economic Affairs will start to evaluate the possible impact on local industries.
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