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American Chemistry Council calls for policy changes to boost exports

By: Gayle S. Putrich

February 7, 2013

WASHINGTON -- The American Chemistry Council (ACC) is calling for the elimination of trade barriers and new energy policies as part of its five-part strategy to increase U.S. chemical exports, including plastics and plastics products.

The plan, introduced Wednesday at a Capitol Hill briefing, urges Congress and the White House to

  • advance comprehensive open trade policies,
  • develop more efficient and standardized chemical regulatory policies,
  • refocus tax policy to reduce transaction costs for industry,
  • ensure a competitive U.S. rail system, and
  • enact comprehensive energy policy and expand shale gas development.

Accessing large new supplies of domestic shale gas has led to a renaissance in the U.S. chemical market, said ACC President Cal Dooley, resulting in a 15 percent increase in the export of U.S.-produced chemicals and plastics since 2010, but policies need to be put in place to protect and balance the U.S. natural gas market and the industries that depend on its stability.

In two short years, said John Paro, CEO of HallStar Co., there has been a dramatic change in the U.S. chemical industry, going from businesses shrinking or moving overseas to increasing domestic production and moving facilities back to the States, all thanks to lower, more stable natural gas prices.

"All of a sudden those polymers [used in] rubber and plastic compounding that were being made overseas are starting to be attractive to make back here in the United States and the formulators that use those plastics are locating back on the shores of the United States and the parts manufacturers and all of the incidental supply chain items that come with it," Paro said. "It really has a huge multiplier effect."

The report also emphasized the importance of a potential U.S. trade agreement with the European Union and called for speedily wrapping up negotiations on the TransPacific Economic Partnership, which the council says could open the door to an additional $1.2 billion in chemical exports.

The U.S. chemical market saw $189 billion in exports in 2012, according to ACC; the council's proposed regulatory changes would add up to $58 billion more in potential export growth, according to the report.