TTIP: A Chance for the Chemical Industry

  • Author:
  • Published: 18 July 2014
  • Copyright: Wiley-VCH Verlag GmbH & Co. KGaA
  • Source / Publisher: VCI
  • Associated Societies: Verband Chemischer Industrie (VCI), Germany
thumbnail image: TTIP: A Chance for the Chemical Industry

The VCI supports the Transatlantic Trade and Investment Partnership (TTIP) between the US and the European Union and sees the German chemical industry among the winners of the agreement.
According to the VCI’s own calculations, the chemical industry in Germany would gain 2,000 new jobs, a production plus of 2 billion euros, and extra value creation of 600 million euros. "Out of this higher value creation 70 % fall to the share of new jobs and remunerations while higher company profits account for 30 %. Consequently, the largest part would reach the employees," said Karl-Ludwig Kley, VCI President and chairman of the executive board at Merck KGaA, during a press conference.

On par with the Netherlands, the USA is the most important foreign market for the German chemical industry. Kley explained that in 2013 the German chemical industry exported goods worth around 15 billion euros to the US. The surplus amounted to over 4 billion euros. The USA is also the major production location outside Germany. The output of German subsidiaries with 26 % of production is almost three times as high as their output in China (9 %), the second important location abroad. German chemical companies employ ca. 70,000 staff in their US plants. Kley said that roughly 40 % of all foreign fixed asset investments by German chemical companies go stateside and the tendency is rising.

According to a study by the research company Ecorys, the possible savings potential for non-tariff trade barriers is up to ten times higher than for tariffs. This is about the harmonization of rules and regulations, the mutual recognition of standards, and possibilities to avoid duplication. Kley, for example, thinks that substances should be labelled with the same warnings and symbols to avoid repacking and relabeling. This would reduce the costs and also bring better safety.

However, Kley also emphasized that a free trade agreement with the USA is no cure-all for weak growth in Europe. The EU still needs to do its homework, for example, in the energy and climate policy.

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