27 February 2013 15:32 [Source: ICIS news]
NATIONAL HARBOR, Maryland (ICIS)--President Barack Obama’s call for a US-EU trade agreement was welcomed on Wednesday by specialty chemical producers as a major opportunity to increase US market share in the EU and eliminate burdensome tariffs.
Larry Sloan, president of the Society of Chemical Manufacturers and Affiliates (SOCMA), told the GlobalChem regulatory conference here that the proposed free trade agreement with the EU is “an enormous opportunity to expand trade with Europe, our second-largest trade partner behind Canada and Mexico”.
Sloan noted that the US chemicals industry paid more than $1bn (€770m) in tariffs for exports to EU member nations in 2011, of which some $600m was paid by organic chemicals manufacturers, a major constituency group for SOCMA.
“With such large trade flows between these economies, eliminating tariffs and addressing some of the challenges posed by non-tariff barriers would benefit both countries,” Sloan said, referring to the US and the EU as a whole.
He said that money now consumed by EU tariffs could be rechanneled to more technology, innovation, research and business development.
In addition, he said, a US-EU free trade agreement could help revive export business in Europe for some SOCMA member firms.
Many SOCMA member companies are small- or medium-size enterprises (SMEs). When the EU initiated its controversial chemicals control system, REACH, the cost of doing business in Europe for many small firms became prohibitive.
Sloan said a free trade deal with the EU “could help restore trade among SOCMA members who abruptly but reluctantly ceased trade with Europe due to unreasonable costs as a result of REACH”.
REACH, the registration, evaluation, authorisation and restriction of chemicals, requires registration, testing and representation fees that make doing business in the EU impractical for many smaller US chemical manufacturers, especially specialty and batch producers.
“Through trade barriers and costly tariffs, trade is more difficult for specialty manufacturers, especially small- and mid-sized companies, than for large, multinational firms,” Sloan said.
“Trade agreements, therefore, are powerful tools for economic growth and help open our industry’s products to the global marketplace,” he added.
In his State of the Union speech earlier this month, Obama called for a free trade agreement between the US and EU and said his administration would press for prompt action toward such a deal.
Sloan spoke to some 450 chemical industry executives attending the third and final day of the GlobalChem conference, which is cosponsored by SOCMA and the American Chemistry Council (ACC).
($1 = €0.77)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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