Towards more openness without weakening trade defense instruments
The chemical and life sciences industry is very export-orientated. Consequently, our business has much to gain through better access to foreign markets. Thus, it is essential that Doha’s multilateral negotiations, which started in 2001, lead to a far-reaching agreement. Trade must not only be free – it must also be fair. Therefore, it is essential that the European Union keeps effective and workable trade defense instruments.
Context
A new round of multilateral negotiations started in November 2001 in the framework of the World Trade Organization (WTO). Called the Doha Development Agenda, these negotiations were very ambitious in the number of items addressed (market access for agricultural products and industrial goods, simplification and harmonisation of customs procedures, direct foreign investments, etc) and the deadline set (negotiations were due to end by January 1st 2005 at the latest).
The negotiations reached an impasse with none of the deadlines for the Doha Development Agenda met. Negotiations officially resumed in February 2007 with no results in sight due to multiple points of disagreement such as those related to agriculture and market access for industrial products that still exist between the major WTO members (US, EU, Japan, India, Brazil).
On the other hand, Peter Mandelson, EU Commissioner for Trade, has launched a broad consultation regarding the EU trade defense instruments (anti-dumping, anti-subsidy and safeguard measures). These instruments remedy unfair trade practices within the EU. A Green Paper was published in December 2006 and all interested parties were invited to answer a questionnaire about the future of trade defense instruments. The European Commission will make its proposals this autumn following a thorough analysis of answers provided.
Importance for chemistry and life sciences industries
On average, 80% of chemical and life science industry production is exported. In 2006, our sector’s exports reached 91.6 billion EUR, while imports amounted to 76.5 billion EUR. Given this high degree of openness, it cannot be denied that better access to foreign markets through the reduction of import duties and the elimination of the non-tariff barriers, especially those in emerging countries, would have a very beneficial effect on our industry. But we can only fully benefit from this if competition is fair. Thus, it is of the utmost importance that the European Union maintains effective and workable trade defense instruments.
Sector’s position
Market access for non-agricultural products is a priority for the Belgian chemical industry. We call for the elimination of all customs duties on chemical products by 2010 by all WTO-members with viable chemical industries. Furthermore, we request reduction and/or elimination of custom duties in certain sub-sectors before the conclusion of the round. The dismantling of all existing non-tariff barriers, the prevention of new barriers being formed, trade facilitation (simplification, harmonisation and automation of customs procedures) and a regime for direct international investment remain important priorities. essenscia respects the protection of intellectual property and the fight against counterfeiting and parallel imports.
With regards to trade defense instruments, the EU already has the most liberal system in the world thanks to its implementation of standards that exceed WTO requirements. Any weakening of this system is unacceptable. Nevertheless, some aspects of the current system can be improved to achieve more transparency and efficiency, to punish circumvention and fraud and to achieve complete independence from political considerations.
Recommendations
The chemical industry still supports the multilateral negotiations system and desires the completion of the Doha round. However, negotiations must not sacrifice important goals for the sake of closure. Negotiations must indeed lead to effective and truly improved market access to other industrialised countries and to emerging countries. It is thus important that both industrialised and emerging countries make ambitious moves in order to visibly reduce the customs fees on chemical products and abolish the no-tax barriers.
Methodological adjustments may improve the working of the EU’s trade defense instruments but the fundamental principles of the European system should not be weakened as the current system is already well balanced and as WTO negotiations have failed reaching an agreement on this issue to date.
Contact :
Laurence Baudesson, lbaudesson@essenscia.be , tel. 02 238 97 53