The chemical industry is a global industry. It is the biggest consumer of its own products, which are widely traded. The industry therefore needs free and fair trade to thrive.
Cefic’s trade policy work aims at creating an overall favourable trading and business environment for chemical companies. In the Uruguay Round, Cefic and ICCA obtained the so-called Chemical Tariff Harmonisation Agreement (CTHA) that harmonised chemical import duties at a low level of 6.5%, 5.5% or 0% among key chemicals producing countries.
The new generation of EU bilateral Free Trade Agreements (FTAs) not only cover import duty abolition they also have provisions on non-tariff barriers, investments, intellectual property, procurement, etc. Such agreements can be beneficial but can also entail trade distortion and a set of complicated and contradictory rules with different trading partners.
Cefic response to Commission’s request for further details on joint ACC-Cefic proposals for enhanced cooperation on chemicals under Transatlantic Trade and Investment Partnership (TTIP)
Cefic advocates the reduction and eventual elimination of all chemical tariffs by all countries with a viable chemical industry. Roughly 80% of chemical products are used within chemical industry and thus the chemical industry itself benefits most from the reduced input costs resulting from chemical tariff liberalisation. Moreover, chemicals are used in a wide range of downstream sectors. Input costs of chemicals can make up a significant part of the production costs of downstream products. Liberalising trade in chemicals therefore has positive effects on the development of these downstream sectors and the whole economy. For instance, it is inconceivable to have a competitive automotive, electronics or textiles and clothing industry if access to chemicals is hampered by high import duties.
Cefic prefers to pursue multilateral trade liberalisation and trade dispute settlement under the aegis of the WTO but recognises that bilateral and regional trade agreements can be building blocks for further multilateral trade liberalisation.
Bilateral free trade negotiations: Cefic is supportive of such negotiations as they can lead to improved market access for the European chemical in key growth regions. Cefic insists on a maximum of reciprocity as regards liberalisation schedules and on inclusion of all chemicals without exception. For economically sensitive products, Cefic prefers longer phasing-in periods rather than their omission from the tariff liberalisation process.
WTO Doha Development Round: In the current WTO trade round of multilateral negotiations, Cefic and ICCA’s request for elimination of chemical import duties by all countries having a viable chemical industry would amount to a yearly reduction of the tariff burden by about €2 billion for the EU chemical and downstream industry alone. Reduction of tariff and non-tariff barriers in other countries would facilitate further export growth of chemicals for which the EU chemical industry enjoys a competitive advantage.
Commission "Trade for All Strategy".
Cefic reacts to new Commission "Trade for All" strategy.
Cefic’s work on WTO issues is directed towards bringing tangible benefits to the Cefic membership by:
• Reducing business costs and improving market access, e.g. via the reduction of tariff and non-tariff barriers;
• protection of intellectual property rights;
• promoting fair trade and the rules-based system, e.g. through the harmonisation of the WTO anti-dumping agreement, widening WTO membership.