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EU-Korea FTA: Chemical Industry Trade Insights & Recommendations

Gain deep insights into EU-Korea FTA implications for the chemical industry. Key recommendations for trade liberalisation partnerships. EU has a significant trade performance with main global competing areas. Chemical sales by country data reveals Korea as the 8th leading producer. Learn about the EU trade surplus, key requirements for FTAs, and messages regarding trade relations. Discover the benefits and concerns associated with EU-Korea FTA.

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EU-Korea FTA: Chemical Industry Trade Insights & Recommendations

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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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