US threat to EC electronics recycling Directive

Parts of the US electronics industry reacted with dismay when the European Commission's Environment Directorate issued its proposals on recycling of waste electrical and electronic equipment (WEEE) last year. The draft Directive included targets for collection, reuse and recycling, set minimum levels for the amount of recyclate to be used in products, and required a phase-out of harmful substances including heavy metals and halogenated flame retardants.

The intention was that producers and importers would bear most of the compliance costs (ENDS Report 280, p 43 ). In the UK, the Industry Council for Electronic Recycling (ICER) said that the proposals would cost domestic manufacturers and retailers alone £2.5 billion per year (ENDS Report 287, pp 40-41 ).

Earlier this year, the American Electronics Association (AEA), whose members include Motorola, Intel, Microsoft and IBM, waded into the fray. They argued that restricting materials used in products without justification represents a technical barrier to trade and contravenes WTO rules.

AEA wants to see the requirement to use recyclate and the substance bans removed from the Directive and has tried to enlist the support of US Trade Representative Charlene Barshefsky in the battle. Judging by the latest draft of the Directive (see p 46 ), it appears that the lobbying effort has succeeded in removing the requirements on recyclate.

Speaking at a conference in London in March, Rod Hunter, a lawyer specialising in trade issues, called the Directive an "invitation for trade disputes". He said that by failing to conduct a risk assessment of the substances to be banned, the EC was leaving itself open to legal action.

Mr Hunter has prepared a paper for AEA which sets out why he believes that the Directive contravenes GATT rules. At the heart of his case is the Commission's alleged failure to demonstrate that removing substances will protect human, plant or animal health.

Furthermore, he argues, if the Commission can show that the substances are a threat, then it would also have to legislate to prevent their use by other industries. Otherwise it would be discriminating unfairly against the electronics industry. Alternatively, it should demonstrate that the risks from the sector are substantially different from those in other sectors.

Another objection was that the requirement to use recyclate has an "extraterritorial" effect in that it protects the natural resources of states outside the EC, and does not meet the criteria set out by the shrimp-turtle ruling.

Finally, Mr Hunter argues that the measures in the draft Directive are not "proportional" - they are more trade-restrictive than needed to achieve the policy objectives. He says that WTO members can only use trade measures as a last resort.

There are signs that the aggressive US industry stance will be backed up by the US Government. In August, in his first major policy statement, Richard Morningstar, the new US ambassador to the EC, complained that the Commission's proposals "appear not to be justified by risk assessments and could be inconsistent with WTO rules."

If the US electronics industry succeeds in forcing the Commission to water down its proposals, it could lead to a wider trend for industry sectors using international trade rules to undermine environmental legislation. "We are seeing industry nobbling Directives even before they come out," said WWF's Nick Mabey.

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