Euractiv, February 23, 2009

CHEMICALS INDUSTRY WANTS 'FREE TRADE, NOT SUBSIDIES'

[Rachel's introduction: European Environmental Bureau President Mikael Karlsson warned that new industrial policies must not jeopardise broader societal objectives, stressing the importance of applying the precautionary principle to new products. "The precautionary principle does not mean banning products or curbing innovation. It can encourage innovation."]

Experts from the EU's chemicals industry have highlighted free trade and the development of sustainable products as key to the survival of Europe's chemical companies. Access to energy and raw materials are also central to long-term competitiveness, according to a new report.

Jurgen Hambrecht, chairman of the board of executive directors at chemicals firm BASF and a member of a Commission high-level group on chemicals, said the chemical industry had undergone considerable restructuring and was not looking to be propped up by governments.

"A strong manufacturing industry is essential for Europe but we don't need subsidies. What we need is a level playing field. We will take care of our own restructuring," he said.

Hambrecht stressed the need for further trade liberalisation through the reduction of tariffs and warned against creeping protectionism within Europe and globally.

The group's report says the best way to guard against protectionist policies internationally is through the World Trade Organisation.

"In the current Doha Development Round, this could be achieved by an ambitious horizontal tariff cutting agreement complemented by a new sectoral agreement for chemicals," the report states.

The EU should also pursue free trade agreements with key trading partners, and common rules on anti-dumping practices should also be pursed through the WTO, the high level group suggests.

The report also emphasises the need to develop sustainable products and invest in research and development.

Key recommendations include:

* More innovation and the strengthening of networks and clusters in order to secure competitiveness and sustainability;

* Responsible use of natural resources and a level playing field for sourcing energy and feedstock;

* Constant efforts to improve efficiency and to provide innovative solutions to contribute to Europe's energy-saving targets, and;

* A competitive chemicals industry needs open world markets with fair competition to fully unlock its potential to ensure a successful future for the industry in Europe.

Positions

Launching the report, European Commission Vice President Gunter Verheugen , responsible for enterprise and industry policy, said it is indispensable for Europe to have a manufacturing industry if it is to survive the current economic crisis. However, he warned against allowing green innovation to slip off the agenda.

"We cannot forget about the green industrial revolution during this crisis. It will make us stronger to focus now on sustainable products and sustainable production. We must not allow short-term needs to jeopardise long-term objectives," stated Verheugen.

He welcomed the chemical industries opposition to protectionism, adding that subsidies that block necessary structural changes are damaging to competitiveness in the long run.

Milan Hovorka , a vice-minister in the Czech Ministry of Industry and Trade , whose country currently holds the rotating presidency of the EU, said the health of Europe's chemical industry depends on its success on international markets. "Further liberalisation is vital for growth and the most promising way to do this is via the Doha trade talks. European companies need meaningful access to new markets. The lack of progress on that front is a source of particular concern."

European Environmental Bureau President Mikael Karlsson warned that new industrial policies must not jeopardise broader societal objectives, stressing the importance of applying the precautionary principle to new products. "The precautionary principle does not mean banning products or curbing innovation. It can encourage innovation." Current policy does not do enough to stimulate energy efficiency, he warned.

Cefic President and Solvay CEO Christian Jourquin said the high level group's conclusions provide a vision for the long-term viability of our industry. "We cannot, however, overlook the present short-term difficulties which could undermine the fulfilment of this vision. We must now work together with the European Commission and the member states to ensure that short-term difficulties will be overcome and to create the right conditions for the necessary investments to be made to secure the future of our industry. Only through such actions will Europe keep its chemical industry, an indispensable enabler for a sustainable future."

SusChem , a platform which brings together stakeholders to boost sustainable technology, said innovation was the key to preparing for economic recovery. It said the High Level Group's report "puts the focus right where it needs to be -- on innovation, which is turning research ideas into societal value through technologies and products".

SusChem encouraged all parties in the EU and member states to put aside segmentation and institutional barriers to build a stronger and more sustainable future for Europe through innovation.

Friends of the Earth issued a statement ahead of the report's publication saying the Commission's High Level Groups were "biased towards business". It said seven groups established to advise the Commission on key issues, including the one on the chemicals industry, are skewed in favour of business interests and its findings are geared towards competitiveness at the expense of other public interests.

Friends of the Earth Europe's transparency campaigner Christine Pohl said: "The European Commission has a duty to protect the environment through its policies so it cannot be right that it is advised by groups dominated by commercial interests. The Commission's failure to take into account a broad range of different views is in clear contradiction with its own consultation standards."

Links

EU

* European Commission: High Level Group on Competitveness of the European Chemicals Industry

* European Commission: Draft final report of High Level Group (19 February 2009)

* European Commission: The state of the European Chemicals Industry

* European Commission: High Level Group recommendations on Research, Innovation and Human Resources

* European Commission: High Level Group recommendations on Energy, Feedstock, Infrastructure and Logistics

* European Commission: Strategy for a strong and competitive EU chemcials industry (19 February 2009)

Press dossiers

* SusChem: Conference material -- Stimulating Innovation through Sustainable Chemistry (3 February 2009)

* CEFIC: Chemicals Industry -- Enabler of a sustainable future (19 February 2009)

* Friends of the Earth: Commission expert groups biased towards business (12 February 2009)