State of the union speech to address US energy, economic growth

12 February 2013 23:09  [Source: ICIS news]

HOUSTON (ICIS)--Several US chemical industry groups expect President Barack Obama to discuss energy issues and economic growth during his State of the Union address on Tuesday night.

The Society of Chemical Manufacturers and Affiliates (SOCMA) believes Obama will focus his remarks on American manufacturing competitiveness and market expansion, a subject on which the organisation says he and Congress “failed to spend sufficient attention during his first term”.

The National Association of Manufacturers (NAM) said that recent GDP figures show that the US economy has contracted as unemployment remains high.

“Manufacturers are urging policymakers to support and enact the pro-manufacturing policies that will spur job creation, provide a skilled workforce and help improve the pace of US economic growth,” said Doug Oberhelman, chairman of the NAM board of directors.

“Manufacturing has the highest multiplier effect of any sector of our economy – investment in manufacturing creates a ripple effect of job creation and growth throughout the United States,” Oberhelman added.

NAM on Tuesday released “A Growth Agenda: Four Goals for a Manufacturing Resurgence in America”, in which the organisation laid out its blueprint for economic growth and competitiveness for manufacturers.

“We hope the president will include concrete actions in his address tonight that will put manufacturing in the United States front and centre as part of the plan for sustained economic recovery,” Oberhelman said.

The National Association of Chemical Distributors (NACD) said it applauds the president’s growth goals, but the past four years have seen little to no real growth in the manufacturing sector.

“As we look to compete on the global stage, we need sensible regulation and certainty in our tax codes so NACD members can align their resources for job creation and economic growth,” said Chris Jahn, NACD president.

The NACD is working with regulatory agencies on environmental and safety issues, especially in the handling of chemicals, but the industry group said growth cannot flourish under the weight of higher taxes and a crippling regulatory environment.

“The tax provisions in the fiscal cliff package early this year will impact small business's bottom line, slowing growth and job creation,” Jahn said. “As the president seeks more tax revenue from top earners, we urge him to recognise that small businesses are a fundamental building block of job creation and that more taxes mean fewer jobs.”

In addition to competitiveness and market expansion, SOCMA expects Obama to announce that the US and the EU will begin free-trade negotiations.

“Data shows that the US chemical industry stands to benefit the most from an FTA [free trade agreement] with the EU - over $1bn in duties were assessed on US chemical exports last year,” SOCMA said. “Within the industry, organic chemical manufacturers would benefit the most, saving the US chemical makers that export these chemicals nearly $600m.”

Signing new free trade agreements is a principle of SOCMA’s “First 100 Days” initiative, which discusses issues important to the specialty chemical industry, the industry group added.

The American Fuel and Petrochemical Manufacturers (AFPM) said Obama’s legacy will be defined by several benchmarks that are “inexorably bound together”, including jobs, the economy, energy independence and national security.

“In his state of the union address, the president has the unique opportunity to begin to write his legacy based upon a free and open market philosophy by embracing the significant role that North American oil and natural gas can play in the economic revitalisation and catalyst for the energy and national security that seven of his predecessors have sought,” said Charles Drevna, AFPM president.

“We hope he does not squander such an opportunity by latching onto unrealistic and costly mandates aimed at picking winners and losers in the marketplace, to the disadvantage of consumers and our nation’s economic growth," he added.

Obama’s speech will begin at 21:00 Washington DC time on major TV networks and on the White House’s live stream.

Afterward, a panel of senior advisers will be answering questions submitted via Twitter, Google+ and Facebook, as well as from the live audience.

By: Tracy Dang
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