A Study On The Impact Of REACH Regulation On China's Chemical Trade And Strategies

EU' s REACH regulation (Registration, Evaluation, Authorization and Restriction of Chemicals) has been entry into force since June 1^st 2007.It has became the strictest and the most comprehensive system of chemicals management as REACH will affect all global supply chains that produce and use chemicals, requiring approximately 30,000 chemical substances before they can be brought into EU market. The implementation of REACH will affect China chemical industry as well. At present, EU has been the biggest trade partner of China. China Customs' statistics showed that the bilateral trade of chemical products in 2007 reached US$375. 01 billion, accounting for 18. 09% of total foreign trade of China chemical products. Over 5 million products from China to EU will be affected.This paper first draws a comparison between EU chemical industry and China chemical industry and concludes that there is less competition between these two regions but more complimentary and co-operations. Then it introduces REACH' s basic elements, process, costs and benefits, and as a technical trade barrier how REACH will affect chemical related industries and international trade in China. REACH will cause possible trade shift and pollution shift. The paper takes dyestuff industry as an example to demonstrate the huge impact. As long as the negative impact, REACH brings also opportunities, such as innovation, for a better environment. The paper suggests the government, enterprises and trade associations adopt right strategies to overcome REACH and develop our own management system for chemicals. Government should take the lead to accelerate industrial restructuring and raise the consciousness of environment protection to sustainable development, help labs to meet GLP standards and develop our own TBT/SPS system. Enterprises should be aware of REACH regulation and take action to pre-register their chemical substance, develop business in other markets rather than EU. Trade associations and other not-for-profit public service organizations should assist government to develop our own technical standards, provide help to enterprises for sharing data and technical info etc.. After all, three parties should work together closely to take appropriate action against REACH.This paper introduces the main contents of REACH and analyzes its impact on Chinese chemical industry and the correct actions all parties should take. Both theoretical analysis and case study are employed. At last it brings forward suggestions to overcome REACH and develop Chinese chemical industry.