China trade barriers cost EU chem industry $379m

19 February 2007 11:38  [Source: ICIS news]

BRUSSELS (ICIS news)--Non-tariff barriers (NTBs) cost European chemical producers upto $379m (€289m) a year in lost business opportunities in China, according to a report published by the European Commission (EC) on Monday.

 

Since China joined the World Trade Organisation (WTO) in 2001, trade between Beijing and the European Union (EU) has become easier and import tariffs for more than 1000 chemicals have dropped from 15% to 2-7% since 2005.

 

But NTBs continue to hinder the EU-China chemicals trade, in particular Beijing's reluctance to enforce intellectual property rights and the often slow and complicated approvals process for investments by foreign and Chinese companies.

 

China's rare earth export quota system also makes it difficult for EU chemical companies to obtain export licences for critical raw materials, such as rare earth metals, phosphorous and fluorspar, giving Chinese competitors with easy access to these raw materials an unfair advantage.

 

Despite these problems, there are plenty of opportunities for European chemical companies to influence the Chinese market, says the report.

 

European companies still lead the field in the manufacturing of petrochemicals such as propionic acid and acrylic esters and Chinese oil companies are likely to continue to seek foreign partners.

 

The EU chemicals industry would likewise gain a competitive edge if the Chinese authorities were to enforce stricter environmental standards.

 

China, with a turnover of €137bn, is the world's fourth largest manufacturer of chemicals, after Germany which has a turnover of  €142bn, Japan (€185bn) and the USA (€415bn).

 

($1=€0.76)

By: Philippa Jones
+44 20 8652 3214

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