EUROPE’S “REACH” FOR LEADERSHIP IN GLOBAL GOVERNANCE: POLITICAL STRATEGY IN ACTION

Abstract

The European Union enacted a comprehensive reform of its chemical safety laws, the Regulation on the Registration, Evaluation and Authorization of Chemicals (REACH) in 2006. The EU rewrote the safety rules governing the chemical industry, the fifth largest manufacturing industry in the world in terms of revenue. After REACH, the EU’s rules became the most comprehensive and stringent in the world and at which point REACH became the de facto standard of compliance for international chemical companies and triggered de jure adjustments of the national laws of many of EU’s leading trading partners, including the US. The EU announced its “strategy” in 2001 with the twin aspirational goals of committing all member states to a high level of regulatory stringency and protecting Europe’s role as a major hub of the chemical industry and leader in science and innovation. The EU used this appeal to gain cooperation of key stakeholders, including industry, trade unions and international environmental NGOs. The EU divided responsibility for drafting and legislating REACH among Environment and Competitiveness directorates within the Commission and analogous groupings within Council and committees within Parliament to ensure that the intended balance between reform goals and economic priorities be maintained. The strategy featured an important international component and was expressed in the unprecedented way that the EU involved international stakeholders in its drafting process and the efforts of its diplomats to address concerns raised by trading partners, particularly in the Technical Barriers of Trade Committee of the WTO. This study will build on work of Anu Bradford, David Vogel and other institutionalist scholars to confirm that EU’s success in making its REACH regulation a template for reform of chemical safety laws was due in part to the large size of the EU Single Market and feedback loops based on the economics of product markets that Vogel and Bradford have focused on in building their theories of “leveling up.” The empirical findings of this work suggest that these authors have not given sufficient consideration to the political strategies followed by global regulatory innovators. In the case of REACH, the EU’s success was not assured as the reform sparked a great deal of political opposition which could have derailed the reform effort at various stages from conception through implementation. EU leadership pushed back on a US-led diplomatic campaign to prevent REACH from being enacted and led a campaign of persuasion in the WTO that was successful enough to buy enough to time to allow the law to take effect and REACH implementation programs to win acceptance by industry that REACH could serve as the de-facto standard of chemical safety compliance globally. Eventually REACH triggered a series of de-jure changes in law among leading trading partners towards increasing stringency and broader coverage, including in the US where Congress surprisingly passed a bi-partisan reform of its existing TSCA law in 2016. This study will incorporate into its theory of global regulatory politics an important place for the characteristic political strategy practiced by the main political movements that dominate the EU. This approach, which I call the Global Political Strategy approach, builds on Vogel, Bradford and institutionalist approaches but extends it in ways that may allow researchers to make better predictions about when attempts to shift global governance in important issue areas will succeed and when they will fail. According to this Global Political Strategy approach, EU has achieved governance success with REACH for four reasons. First, it has sufficient economic power expressed in the size of its home market for chemicals. Second, the EU can deploy the regulatory capacity needed to write and enforce REACH, with such capacity understood chiefly as the power to successfully establish a universal registration requirement and exclude products and services from its home market if they are not registered or if they are deemed unreasonably dangerous and excluded from the marketplace. Third. the markets for chemical products display characteristics that make exit from the European market costly for both European and International actors and encourages “trading up” to higher standards more generally (i.e. the markets exhibit “inelasticity” and “non-divisibility”). Finally, the EU deployed an effective political strategy that overcame international opposition to its preferred policies and discouraged rivals. This last element has not yet been sufficiently explored in previous studies of the case, and is an important gap filled by this work. Through its well-thought out and flexible political strategy, EU gained first-mover advantage in chemicals policy and thereby molded of the behavior of key actors to win international acceptance of its policy preferences despite strong international resistance led by the United States. Careful examination of REACH using the tools of process tracing sheds light on mechanisms that could lead to a better understanding of global governance and to more precise specification of boundary conditions under which assertions of state economic power over global markets succeed and when they do not.