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February 13, 2013

VCI: Free world trade is at the top of the political agenda

Posted by Gerald Ondrey

The German Chemical Industry Assn. (Verband der Chemischen Industrie, VCI; Frankfurt am Main, Germany; supports a rapid start of negotiations between the E.U. and the U.S. towards a transatlantic free trade zone. The VCI’s director-general Dr. Utz Tillmann is glad that U.S. President Obama gives the green light for talks about a comprehensive trade partnership. Tillmann states: “We appreciate that free world trade and the transatlantic partnership have moved back to the top of the political agenda. Both are essential to our industry and thus to our country. With such an agreement, Europe and the USA can stimulate growth in the transatlantic market and help create new jobs.”

According to Tillmann, industrial tariffs are low in trading between the U.S. and the E.U. The average U.S. chemical tariff is 2.25%. But with the enormous trade volume, even low extra charges cause high costs: in 2010 European chemical companies paid almost €700 million to the U.S. Treasury for exports stateside. The other way round, U.S. companies paid well over €1 billion to Brussels.

Tillmann thinks that several goals should be pursued in an agreement with the U.S. Beside an end to all industrial tariffs, eliminating non-tariff trade barriers is also important to the chemical industry. As the first step, regulations and standards for protecting the environment, consumers and health should be stronger attuned to each other and finally lead to mutual recognition. Further countries should be able to accede to this agreement, in order not to weaken the World Trade Organization (WTO).

Moreover, Tillmann believes that an agreement with the U.S. will bring fresh impulses for other bilateral free trade agreements too. As the WTO Doha round is at a standstill, Tillmann sees no chances of reducing trade obstacles in this setting. Against this backdrop, he is in favour of the E.U. driving forward bilateral agreements also, for example, with Japan. The focus needs to be on initiatives for open markets and fair competition. Tillmann concludes: “Now we can push the door wide open for more freedom and fewer restrictions in world trade — if Europe and the USA show political leadership and say no to protectionism.”

Source: VCI



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