The chemical manufacturing sector is one of America’s top exporting industries, with $191 billion in exports in 2014, accounting for more than 14 percent of all U.S. exports. The industry employs over 800,000 men and women, and of these jobs, more than 200,000 are export dependent. Additionally, the chemical industry is a key supplier for a broad range of downstream industries with large international presence, including automotive, agriculture, buildings and construction, pharmaceutical, transport, textiles, and many others.
Success in today’s global economy requires companies, in all sectors, to compete effectively in international markets. Opening market opportunities for business, through multilateral, regional and bilateral agreements, is critical to boosting the competitiveness of US chemical manufacturers and chemistry-dependent sectors. U.S. trade policy is a key priority for ACC and its membership.
U.S. free trade initiatives, from existing agreements such as NAFTA and the Korea-U.S. FTA to prospective agreements such as the TransPacific Economic Partnership (TPP) and a potential Transatlantic Trade and Investment Partnership (TTIP), are critical to boosting the U.S. chemical manufacturing sector’s competitiveness while also driving wider economic growth. Eliminating the few remaining tariff barriers on trans-Atlantic trade in chemicals would save $2 billion per year for chemical manufacturers—including more than $600 million per year for intra-company trade alone. Anticipated savings from enhanced regulatory cooperation would be even greater, generating upwards of $15 billion in additional economic output for chemical manufacturers on both sides of the Atlantic.
ACC analysis shows that an ambitious outcome on TPP has the potential of generating $1.2 billion in additional export growth. This potential growth can only be achieved through trade agreements that are ambitious, comprehensive, contain full tariff liberalization, and make a strong commitment to improve market access.
ACC Policy Position
Future economic growth for the chemical sector depends on establishing trade policies that ensure a strengthened competitive position of the U.S. chemical industry in both the domestic and international markets.
- Trade policy must create a level playing field with fair and reciprocal market access with key trading partners.
- Trade negotiations should result in comprehensive and ambitious agreements that address the elimination of tariff and non-tariff barriers in all areas of trade, as well as addressing “21st Century” trade issues, such as regulatory coherence and trade facilitation.
- ACC supports the launch of negotiations on a comprehensive U.S.-EU trade agreement as soon as possible.
- Congress should grant the President Trade Promotion Authority so he can swiftly negotiate a new agreement with the EU and other pending agreements such as the Trans Pacific Partnership.
- A U.S.-EU trade agreement should mandate the development of an agreed work plan to specific areas of regulatory cooperation.
- The Administration should pursue an aggressive trade policy, including expanding the TPP to include key APEC economies not already a part of the negotiations.
- The U.S. government should dedicate significant resources to ensuring trading partners are complying with their FTA and/or WTO commitments, with an emphasis on non-tariff barriers (e.g. local content rules) that impose unreasonable delays and costs on U.S. companies.