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Hearing of the International Trade Committee on EU-Korea FTA - 23 June 2010

Hearing of the International Trade Committee on EU-Korea FTA - 23 June 2010 - The case of the chemical industry - René van Sloten, Cefic rvs@cefic.be. About 1/4 of chemicals production is sold outside the EU. Rest of Europe. 19.5. 29.5. NAFTA. 20.5. 22.5. Asia*. 32.2. 29.6.

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Hearing of the International Trade Committee on EU-Korea FTA - 23 June 2010

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  1. Hearing of the International Trade Committee on EU-Korea FTA - 23 June 2010 - The case of the chemical industry - René van Sloten, Cefic rvs@cefic.be

  2. About 1/4 of chemicals production is sold outside the EU

  3. Rest of Europe 19.5 29.5 NAFTA 20.5 22.5 Asia* 32.2 29.6 5.1 Japan LAC** 3.1 5.3 7.0 Africa 2.4 Rest of the World 1.4 8.0 5.4 EU has a significant trade performance with the main competing areas in the world: 2009 EU trade flows in € billion Source: Eurostat and Cefic * excl. Japan; **Latin America and the Caribbean

  4. Top 30: Chemicals sales by country (2008): Korea is the 8th leading chemicals producer in the word

  5. Chemicals: EU trade surplus with Korea amounted to about euro 1,5 billion

  6. EU exports to Korea (euro 2.9 billion in 2009): 32% of EU exports are attributable to Petrochemicals

  7. EU imports from Korea (euro 1.45 billion in 2009): 53% of EU imports are attributable to Polymers

  8. Cefic key requirements regarding FTAs • Chemical industry prefers multilateral route to trade liberalisation • We recognise the new approach embodied in global europe, however economic and not political considerations should be the basis for concluding FTA • Key criteria • Economic potential • Actual level of duty and tariffs/non tariff barriers • Risk for EU companies of being excluded by FTAs between major trading partners • Key trading partners of the chemical industry: USA, Japan, China, Mercosur, South Korea, India, ASEAN, Ukraine

  9. Key messages regarding FTAs • Commission to look at trade relations and future potential when selecting FTA partners • FTAs create their own momentum and Commission should watch OECD countries’ FTA policies to avoid competitive disadvantages • Commission to apply consistency: not too much divergence between FTAs (e.g. Rules of Origin) • Do not conclude FTAs at any cost and make clear at an early stage what are dealbreakers • No exceptions on industrial tariffs (zero after max 7 years) • Elimination of all NTBs • Use FTA negotiations to tackle subsidies, export taxes and dual pricing • Lilberal minded sectors should not be paymasters for others

  10. Key messages regarding EU-Korea FTA • EU chemical industry is strongly supportive of Free Trade Agreement with South Korea and urges for rapid approval to get competitive edge over other countries • This ‘third generation’ agreement covers market access, investment, intellectual property in a comprehensive manner • Free Trade Agreement will allow for further growth of chemical trade with South Korea and provides for 3-step liberalisation for sensitive EU polymers sector • Pending multilateral trade liberalisation it is an important signal to other FTA partner countries that the EU is ready to engage

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