SEA Chemicals Need To Learn From The Past

China, Company Strategy, Economics, Europe, India, Indonesia, Malaysia, Polyolefins, Singapore, Thailand

By John Richardson

THE whinging is getting almost unbearable in Southeast Asia over the Asean-China Free-Trade Agreement (ACFTA).

The deal was under discussion for EIGHT years and yet chemicals and polymer producers and customers seem to have left it until after-the-fact to start raising objections.

Indonesian industry association representatives have gone as far as to suggest that 7.5m out of the country’s total of 30m manufacturing jobs are under the threat as a result of ACTFA.

And at a conference in Singapore today I had to endure polymer producers from Southeast Asia moaning about not being able to compete with big bad China.

“There’s no point in complaining now. What needed to happen was for industry representatives to take an active interest in negotiations for these free-trade deals right from when they first began,” said a well-informed source.

“But instead this was pushed to the back of the collective mind. Clearly, China’s competitive position has improved greatly since the talks started eight years ago, which is exactly why producers should have been constantly engaged in the debate.

“It will be very, very difficult to change the terms of ACTFA now because of the level of politics involved.”

The approach of the Southeast Asian industry players was in stark contrast to that of their counterparts in India who managed to get petrochemicals excluded from an India-South Korea free-trade deal a few years ago, he added.

Have the lessons being learnt? Let’s hope so as discussions take place for Singapore-European Union (EU), Thailand-EU, Vietnam-EU, Indonesia-EU and Malaysia-EU free-trade deals.

More on these negotiations later on.


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