1. CHEMICALS AND THE DOHA ROUND Monday, June 13, 2005 World Trade Organization Geneva, Switzerland

2. 2 International Council of Chemical Associations (ICCA) Council of chemical industry associations from: Australia, New Zealand, Japan, Europe, North and South America, and South Africa Represent approximately 75% of global chemicals production World chemical production is $1.9 trillion annually and 40% of this is traded internationally Develop industry positions and programs on international issues: health, safety, and the environment; international transport safety; intellectual property; trade policy; elimination of chemical weapons Promote and coordinate Responsible Care® and other voluntary chemical industry initiatives

3. 3 $505.8 $101.1 $650.3 $70.8 $74.9 $541.5 Size of Regional Chemical Industries, 2003 ($ billion)

4. 4 Value of Chemical Inputs in Consumer Products

5. 5 World Chemical Output & Trade ($ billion) During the 1980s, world chemicals exports grew 1.3 times as fast as world chemicals output. During the 1990s, world chemicals exports grew 2.5 times as fast as world chemicals output. 35% of this world trade is intra-company.

6. 6 Chemicals as Share of World Merchandise Exports (share based on value) Source: WTO 19952003 Machinery and transp. equip. 17.517.0 Mining products10.913.2 Office and telecom equipment12.112.8 Chemicals 9.710.9 Automotive products 9.2 9.9 Agricultural products11.7 9.2 Other consumer goods 8.6 8.8 Other semi-manufactures 7.9 7.2 Clothing 3.2 3.1 Iron and steel 3.1 2.5 Textiles 3.0 2.3.

7. 7 Change in Share of World Chemicals Exports 19902000 Developed countries’ share of world chemical exports 83.5%79.3% Developing countries’ share of world chemical exports 16.5%20.7% World chemical exports (billions) $308.8$570.2 Source: UNCTAD

8. 8 OutputExportsImportsSalesEmployees 1EC484.7125.674.2433.71,900 2United States454.180.278.9452.81,022 3Japan213.033.723.1202.4366 4China108.814.032.0126.83,288 5Korea53.412.512.953.8129 6Brazil38.33.510.545.3280 7India36.83.85.638.6727 8Taiwan32.87.215.641.2126 9Russia29.15.39.132.9729 10 Switzerland27.724.215.218.762 11 Canada23.913.020.431.394 12 Mexico12.53.39.218.466 13 Argentina11.53.83.811.559 14 Australia11.42.86.915.544 15 South Africa10.52.03.111.6175 16 Turkey10.01.17.816.740 17 Singapore8.89.68.07.213 Global Chemical Industry Rankings, 2001 $ billions, employees thousands

9. 9 Global Chemical Industry Rankings, 2001 $ billions, employees thousands OutputExportsImportsSalesEmployees 18 Malaysia8.13.85.910.236 19 Saudi Arabia7.34.83.05.540 20 Israel7.04.53.35.825 21 Thailand6.12.75.69.065 22 Philippines5.80.32.58.045 23 Indonesia5.61.85.99.7165 24 Colombia5.61.74.07.951 25 Venezuela4.61.91.74.440 26 Ukraine4.00.93.66.7165 27 Pakistan3.80.21.85.450 28 Chile3.70.51.34.524 29 Egypt3.00.31.54.2110 30 Bulgaria2.41.00.82.240 31 Peru2.40.30.93.026 32 Belarus2.11.21.72.665 33 New Zealand1.81.01.72.510 34 Romania1.50.51.12.175 Sources: ABIQUIM, ANIQ, CEFIC, Statistics Canada, United Nations, American Chemistry Council estimates

10. 10 Top 25 Destinations for U.S. Chemical Industry Direct Investment

11. 11 World Employment in the Chemical Industry thousands of people, 2001 Asia Pacific4,97549% Western Europe1,74317% North America1,18312% Central/Eastern Europe98110% Latin America6106% Africa3654% Middle East2102% Total World Employment10,067100%

12. 12 Chemical Industry Sectoral Proposal Chemical Tariff Harmonization Agreement (CTHA) –Voluntary agreement in Uruguay Round –Reduce tariffs to 5.5% and 6.5%, some lines to 0 –51 participants, including new EU members –Pharmaceutical zero-for-zero Doha Round: Elimination of chemical tariffs –Chemicals classified under HTS chapters 28-39 –Maximum flexibility in staging Non-tariff barriers –Export taxes, import licensing, quotas, trigger price mechanisms, discriminatory standards –Regulatory divergence

13. 13 Chemical Industry Sectoral Proposal Country coverage –Countries with a viable chemical industry –Chemical production of $3 billion or more per year Product coverage –HTS Chapters 28-39 with no exceptions Staging –Current CTHA participants: 5 years –Others Bind all unbound tariff lines Eliminate from bound rates Tariff LevelTime Frame 25% or less10 years more than 25%15 years –Maximum flexibility for sensitive products

14. 14 Why Chemical Tariff Elimination? Tariff liberalization benefits chemical industries worldwide –Due to the globalized and capital intensive nature of this sector, chemical industries are globally competitive wherever they are located. –Competitive chemical industries rely on chemical inputs. Countries with low chemical tariffs make themselves more attractive for investment in the chemicals sector. Tariff liberalization benefits all sectors –Chemicals are inputs into all manufacturing and agricultural production. Lower chemical tariffs reduce input costs and prices of intermediate and finished goods. Tariff liberalization supports economic development –Improves access to products that can increase agricultural crop yields and control animal and plant diseases. –Improves the competitiveness of downstream producers in domestic and foreign markets. –Improves affordability of and access to consumer goods for more people worldwide.

15. 15 Responsible Care ® Voluntary chemical industry initiative Started in Canada in 1985 and now in 52 countries Commitment to continued improvement in all aspects of health, safety and environmental performance and to open communication Rigorous system of checklists, performance indicators and verification procedures enables the industry to measure improvement Industry associations implement initiative in their countries. All programs are monitored and coordinated by ICCA.

16. 16 World Summit on Sustainable Development August 2002 Action Plan on Chemicals –By 2020, chemicals used and produced in ways that lead to minimization of significant adverse effects on human health and the environment based on sound science, risk assessment, and risk management ICCA supports the action plan through –Responsible Care® –Development of a global strategic approach to chemicals management by 2005 –Implementation of a global system for the classification and labelling of chemicals by 2008 –Participation in UN Environment Program (UNEP) and International Forum on Chemical Safety (IFCS)

17. 17 ICCA is committed to meeting WSSD’s sustainable development challenge ICCA is making a significant contribution in these areas: Chemical safety: extending Responsible Care ® Innovation: developing new products and technologies Capacity building: improving knowledge about chemicals through training, education and communication and promoting health, safety and environmental standards worldwide Globalization: transferring efficient technologies throughout the world and improving education and training