EU chemical firms eye Asian investments


Reuters

BRUSSELS — Europe’s chemicals firms can thrive without the successful conclusion of world trade talks as long as they can set up shop in Asia’s booming markets, according to an industry executive. “Trade policy in industry is not so important anymore,” Reinhard Quick, who heads the Brussels office of the German Chemical Industry Association, told trade experts and lawyers in Brussels on Tuesday. With no real hope remaining for the Doha round of global trade negotiations, which have reached deadlock after almost a decade of talks, Europe’s chemicals industry should avoid costly tariffs by investing in and accessing the booming markets of China, Brazil and India, Quick said. “If the market share in Asia rises we can invest in Asia or export to Asia. The decline of the European chemicals industry is not a threat, it’s an opportunity,” he said. China, India and Brazil have developed a voracious appetite for chemicals for use in sectors from manufacturing to agriculture, cosmetics and construction, according to industry data. Between 2005 and 2010, China’s chemicals consumption grew by more than 23 percent per year, while Brazil’s demand grew 14 percent every year and India’s 12.3 percent. During the same period German demand grew 4.2 percent annually, while French and British demand contracted. Limited European demand combined with immovable tariffs suggests that benefits go to companies established in the growth countries themselves: Europe’s share of chemicals sales fell more than a fifth to 23 percent between 2000 and 2010, while Asian sales have risen more than a third to dominate more than 45 percent of world sales. Yet while the chemicals industry is no longer pushing for a global trade deal at the World Trade Organization (WTO), originally intended to open up trade and add billions of dollars to world wealth, or even for more limited sector-specific deals, Quick said trade barriers could eventually be cut if the EU and United States teamed up.

The WTO’s 153 members have failed to seal a global trade accord known as the Doha Development Agenda, with divisions over who should make concessions exacerbated by a global economic downturn.