Indeed, there were no measures specifically in the IMP aimed at the sector but rather a series of amendments to existing common standards for classifying, registering, labelling and marketing dangerous substances and preparations. In addition, the general IMP legislation was expected to make it easier to trade within Europe. The Internal Market Programme has reduced obstacles to trade in the European chemical industry and has led to increased competition. This implied lower prices than would otherwise be the case and lower costs, as firms expanded and merged to take advantage of the economies of scale in the industry. According to our survey, however, the IMP and related EC initiatives have led on average to an increase in short-term production costs but the results vary depending on the nature of the legislation and the type of cost.
Environmental legislation is thought to have led to the most significant increases in costs.
The available evidence suggests however that this has not led to a loss of international market share, mainly because environmental costs are a small proportion of the total. Intra-EC exports have increased relative to total exports, since 1987. This can reasonably be assumed to be the date when companies started to anticipate the IMP in their decisions. The increase in intra-EC trade share to total trade, however, can also be partially attributed to a fall in the European chemical sector trade balance with other major trading blocks. Intra-EC import penetration also increased at a higher rate between 1987 and 1992 than between 1980 and 1986 although total import penetration increased over the same period too.