The European Union's 2006 REACH legislation, which imposed sweeping new regulations on the continent's trillion-dollar chemicals industry, was a headache for paint and polymer makers.

But, once implemented, it helped stitch together the world's most lucrative market. Despite growth in Asia, Europe and the US still dominate the world's $4 trillion chemical business-a petroleum-heavy behemoth that accounts for the makeup on your face, the cologne on your neck and the paint on your walls. Eight of the 10 top chemicals companies are European or American, led by Germany's BASF.

EU and US companies are especially strong in chemicals sectors requiring proprietary technology and sophisticated products, for example in insecticides, which generates over $40 billion a global trade a year, according to IHS Markit's Global Trade Atlas.

Top Exporters, Insecticides, 2016

And the UK, which has produced chemical compounds since Romans discovered salt mines 2,000 years ago, still has a dynamite chemicals and pharmaceuticals sector, employing over 150,000 people, although many of the plants are now foreign-owned. There are over 5,000 companies in the UK who have completed the REACH legislation, a rate of compliance in the EU second only to Germany.

Now Brexit threatens to throw a wrench into all that. It remains unclear whether REACH will continue to apply after Brexit. In her speech in Florence in September, British prime minister Theresa May said EU rules would continue to apply after Britain leaves the EU in March 2019. "During the implementation period access to one another's markets should continue on current terms," she said.

The UK chemicals sector is worried. In a recent survey, over 75% of the members of the British Coatings Federation said they saw Brexit as a "a risk, not an opportunity." Another survey, by the Chemical Industries Association, which represents companies with UK plants such as Ineos, BP and Croda International, found that zero percent of its members supported Britain leaving the EU.

The CIA's study found that its industry was more vulnerable to tariffs than other sectors if Britain fully divorced the EU, and developed its own regulations and exited the free trade zone. Around "70% of current UK-manufactured chemical (including pharmaceutical) exports from the UK to the rest of the European Union are likely to attract a tariff", it wrote. Subsequent tariffs could cost the UK hundreds of millions of dollars, it found.

As data from IHS Markit's Global Trade Atlas underscores, there's a lot at stake. The global chemical industry is heavily integrated and dependent on fluid supply chains and easy market access. Global chemical trade is growing. Although sluggish prices caused by lower oil prices have dampened trade figures, since the turn of the century, global organic chemical exports have risen to $349 billion in 2016 from $157 billion in 2000, according to GTA.

And the UK's main markets remain Europe and the US. Despite Asia's strong growth, less than 3% of the UK's exports of organic chemicals went to China in 2016.

Top Markets for UK Producers, Organic Chemicals, 2016

The reliance on Europe is even more pronounced for specialty chemicals, a higher-margin and more high-tech category which includes insecticides, paint coatings and refractory cement ingredients.

Top Import Markets for UK producers, Miscellaneous Chemical Products, 2016

But if the UK chemical industry's worst Brexit fears materialize, then what for UK-based chemicals producers? Industry insiders point to the US, another trillion-dollar market, which has low tariffs on chemicals, typically between zero and 6.5%. As GTA data shows, UK exports to the US have fluctuated with oil prices, currencies and other factors, indicating there's potential to grow.

UK Organic Chemical Exports to US

Amid all the confusion, all the UK chemicals sector can do now is watch, wait and lobby. But whatever happens with Europe, it's likely that EU-US trade in chemicals will continue to offer opportunity for producers, shippers and logistics companies, especially given the shale gas revolution in Pennsylvania, Texas and other states, and its abundant supply of cheap energy, a key input for the chemicals sector.

The Trade Numerologist is IHS Markit's unique weekly look at global trade by award-winning journalist John W. Miller, formerly of the Wall Street Journal, using proprietary numbers from IHS Markit's Global Trade Atlas database, the world's most complete and accurate set of trade numbers.