Business
Chemical industry quiet on new trade setup Industry has not taken any identifiable position on various proposals to change and strengthen government's handling of global trade Time may be running out for the U.S. chemical industry. The industry, usually very conspicuous when it comes to pumping advice on trade issues into government channels, has been unusually quiet on the various proposals floating around Washington to streamline government's handling of international trade.
Several important bills have been introduced in Congress. Each has a different approach to government reorganization. Last month, as required by law, the President sent Congress his proposal for reorganizing and strengthening the government's international trade functions. The important feature of the President's proposal is that it avoids forming a completely new department. It would consolidate both trade policy coordination and trade negotiations in the Special Trade Representative office (renamed the Office of the U.S. Trade Representative). It also would consolidate day-to-day operations of nonagricultural trade functions in the Department of
Commerce (renamed the Department of Trade & Commerce). Now, Congress and the Administration are getting set to whip up some sort of compromise agreement. So far, there is no identifiable "chemical industry position" on government reorganization. By the end of this month, most of the work on a compromise reorganization plan may be completed. That, at least, is the game plan. The strategy is similar to the one used to speed the recently enacted trade bill through Congress. During the August recess, Administration officials and staff members of key Congressional committees will hammer out the details of a compromise reorganization plan. Shortly
Bills to streamline trade function all have different approach Administration proposal
PROPOSED ORGANIZATION
Department of Traded Oprhrnerce
ORGANIZATION NOW Department of Agriculture Export-Import Bank
No change
! Include ^ j M l No change
Special Trade Representative
Sector analysis Tariff nomenclature
Î No change I ι
Secretary as nonvoting member
Overseas Private Investment Corp.
State Department Commercial attaches East-West trade Economic reporting Commodity and trade agreements Treasury Department Customs Service Dumping and countervailing duties International investment International Trade Commission Investigation and reporting
Roth-Ribicoff
j Include
Policy coorj Include dlnatfon, î negotiations j Include
;
Include No change Include * ^ No change ;
Include .
- ; ^ ; :i
i|-< ';{K/ Include^ Included
Byrd
Special Trade j Department of Department Represent- I international of interative j Trade & national : > j Investment Trade
No change ; / !
j | I ! I j } i ! I ».
Include Include No change Include
Jones-Frenzel
j Department of Commerce & ! international Trade
Special Trade Representative
I Include j No change f01?^ ,'! Agricultural Service ι No change (Secretary as ! board chairman Secretary as board chairman Include
Include Include Include ; Include
Include Include
" Include ; Include ,
Include
Include
(Secretary as j board ; chairman Import relief j functions I
Negotiation functions
; Include ( (Include
Include Include
! 1 j ! Include ; 1 j
No change
No change
?
j j No change
No change
; :'·*;- - * ^; | No change ; ! Include
No change No change
;
'J J Transfer, but maintain \| independence j Include ; Include
Aug. 20, 1979C&EN
9
after Congress reconvenes in September, the Administration will submit it to Congress as a reorganization "plan" rather than as a legislative proposal. That way, the plan won't be subjected to time-consuming amendments. Congress, in a sense, will have to vote the plan up or down, just as it did with the trade legislation. It is hoped that Congress will act on the reorganization plan by Thanksgiving. At the outside, the Administration wants action by Jan. 1, when the nontariff barrier codes negotiated at the Geneva trade talks go into effect. Some Washington skeptics doubt that Congress and the Administration can stick to this timetable. Others, citing the success of the recently enacted trade legislation, think it can be done. Either way, the chemical industry should have formulated its own trade reorganization policy by now in order to be effective. It hasn't. With the exception of a very few company trade experts, none of the usually active chemical industry trade spokesmen have had much to say on the subject. The Office of the Chemical Industry Trade Adviser (OCITA), focal point for overall industry trade policy, has been noticeably quiet. Whatever the reason, it certainly is not because the chemical industry doesn't have a vital interest in how the government restructures its trade offices. Many important trade issues will be cropping up soon. How U.S. trade officials handle them will be important to an industry that exported $12.6 billion worth of chemicals last year and sports a hefty $6.2 billion trade surplus. One of the most important, for instance, is the possibility that the European Economic Community or one of its member countries may take action against surging imports of synthetic fibers from the U.S. This problem could have serious repercussions for the U.S. chemical industry. The Europeans complain that U.S. domestic oil-pricing policies are tantamount to a subsidy and give U.S. fiber producers an unfair competitive advantage. If this complaint is upheld, it could set a damaging precedent for all petrochemical derivatives. There are other potential problems. Changes are pending in the generalized system of preferences, which permits qualified developing countries to export to the U.S. dutyfree. Some U.S. chemical companies believe that they already have been hurt by such imports. Under the 10
C&EN Aug. 20, 1979
proposed changes, they could be hurt even more. The prospect of forming some sort of North American trade alliance (among the U.S., Canada, and Mexico) also could have a tremendous impact on the U.S. chemical industry. And with American Selling Price no longer available, chemical companies will rely more heavily in the future on antidumping and countervailing duty action for import protection. How all of these issues are handled by government is important to the chemical industry. Referring to government reorganization proposals, OCITA deputy Myron T. Feveaux says that the chemical industry has as much, if not more, at stake as any industry in the country. But, he adds, this doesn't mean that the industry knows it. Not knowing it may be a reason why the industry has yet to come up with a position paper on trade reorganization. If there is to be an "official" industry position at all, it apparently will be a carbon copy of the stance taken by the Business Roundtable. That isn't surprising. At a recent Senate committee hearing, William S. Sneath testified in support of the Administration's reorganization proposal. Sneath is chairman of Union Carbide and he testified as chairman of Business Roundtable's task force on international trade and investment. As head of OCITA, he also is the chemical industry's chief trade adviser. Because of that, what the
chemical industry thinks about trade reorganization no doubt will be what Business Roundtable thinks. And the roundtable thinks that, although no reorganization plan could be perfect, the Administration's proposal is one that can manage the trade problems facing the country. Others aren't completely certain of that. They say that the President's proposal is too sketchy to tell exactly how it will work. Presumably, Congressional staffers and Administration experts will be working this month to put some meat on the President's bare-bones proposal. But it won't be easy and it may involve some trade-offs. Senators William V. Roth Jr. (R.Del.) and Abraham A. Ribicoff (D.Conn.) have introduced legislation calling for a completely new Department of Trade & International Investment. Sen. Robert C. Byrd (D.W.Va.) wants a new Department of International Trade. On the House side, Representatives James R. Jones (D.-Okla.) and Bill Frenzel (R.-Minn.) have introduced a bill that differs only slightly from the Administration's proposal. The Administration doesn't want a new department. Many Congressmen, disenchanted with the Department of Energy, don't want one either. But what comes out of a compromise agreement remains to be seen. Whatever it is, the chemical industry will be affected. Earl Anderson, C&EN New York
Energy conservation enters tough second stage Fresh from an excellent performance in meeting its first goal of a 15% reduction in energy use, the U.S. chemical industry has committed itself to making another 15% saving. Although the second stage won't be nearly so easy, some companies are well on the way and will reach even this goal years in advance of the 1985 deadline set by the Chemical Manufacturers Association. In more specific terms, both energy savings goals are set in reference to energy per unit production in 1972. The first 15% reduction was due in 1980 but in fact was met industrywide in 1978. The second 15% drop is targeted for 1985. The most ambitious single program surfacing to date is by American Cyanamid. Cyanamid is confident of achieving the 30% total energy reduction by 1980. Dow Chemical may not be far behind, having already surpassed its own 20% reduction goal for 1980. Other companies have adopted the
1985 formal date for the 30% energy reduction but in practice have put themselves ahead of schedule. For example, Union Carbide in May announced a four-point program to reach 30% energy conservation by 1985. However, Carbide was two years ahead of the 1980 goal of 15%. The dollar value of energy conservation is impressive. Carbide president Warren M. Anderson says that the company's 15% use reduction worked out to saving the equivalent of 11 million bbl of oil in 1978 worth $150 million. By 1985, the second figure could rise to $320 million. At American Cyanamid, Eugene W. Steele, corporate manager of energy conservation, says that energy costs in 1978 were reduced $19 million or between 15 and 20%. Savings in 1979 will be larger as Cyanamid plants bear down on their collective 1980 goal of 30% savings. Second-stage energy conservation is much more sophisticated than the first, which can be achieved largely
