Chemical & Engineering
NEWS MAY 22, 1967
The Chemical World This Week U.S. chemicals men outraged by results of Kennedy round A stunned and outraged U.S. chemical industry had bitter things to say last week on the outcome of the Kennedy round of trade negotiations. "A sell-out," snapped the executive v.p. of a major U.S. producer of synthetic organic chemicals. "It was clear from the start that we were to be the sacrificial lamb, but this far exceeds our worst fears," moaned one of the industry's leading trade authorities. So ran the comments as the U.S. chemical industry attempted to assess the impact of U.S. concessions to foreign chemical-producing nations. In coming to terms at long last with the European Economic Community, the U.S. negotiators agreed to: • Slash U.S. tariff rates 5 0 % across the board on chemicals and establish a 20% ceiling on all U.S. chemical duties except for dyes and sulfa drugs in return for a 2 0 % reduction in chemical tariff rates by E E C . •Press Congress for legislation abolishing the American Selling Price (ASP) method of customs valuation of benzenoid chemicals and reducing the ASP-to-ad valorem converted rates by 50%. If Congress goes along with the Administration on this, E E C has agreed to reduce its chemical tariffs another 30%. Duty rates on both sides would be reduced gradually to the agreed-upon levels over a five-year period. At press time, details on the overall agreement still were sketchy. There was no official word on which chemicals, if any, either side has withheld from the general tariff-cutting formula for special tariff treatment. Nor is it clear at this point whether the general terms of the U.S.-EEC agreement on chemicals will apply to other Free World chemical powers such as Britain, Japan, and Canada, who were parties to the negotiations. Chemicals were the last major roadblock to fall in the marathon trade talks—and then, not until time had all but run out for the U.S. negotiators, whose authority to enter into reciprocal tariff-cutting agreements with Free World countries expires June 30 with the Trade Expansion Act of 1962.
SOCMA's Mahoney A gun to the head approach Toward the end, the U.S. was insisting that EEC tie the 30% stage of its proposed two-stage reduction in its chemical tariffs to the basic U.S. offer of a 50% across-the-board cut in its chemical tariffs which the U.S. negotiators were authorized to make, rather than to the side agreement on the removal of ASP which would require subsequent approval from Congress. But in the end—confronted on the one hand by a seemingly unyielding EEC with time on its side, and on the other by the grim prospect of returning home emptyhanded after four years of bargaining—the U.S. negotiators gave in. As might be expected the chemical agreement came under the most blistering attack from the Synthetic Organic Chemical Manufacturers Association. "Our negotiators repeatedly said that they would negotiate a package on ASP completely separate and apart from the Kennedy round in order that Congress would be free to accept or reject such a deal on its merits," SOCMA president James D. Mahoney said last week. Instead, he claims, "they have adopted a 'gun to the head' approach with Congress by negotiating a glaringly unreciprocal deal on chemicals in order to permit
EEC to load the so-called separate package with tariff cuts for which the U.S. has already paid in the Kennedy round." Mr. Mahoney urges Congress to "flatly reject the so-called separate package on ASP and take the legislative steps necessary to rescind the unreciprocal portion of the 50% cut in chemical tariffs which was given away by our negotiators in Geneva." "The thing that most unnerved me about the agreement," Ernest M. May, chairman of SOCMA's dyes task force chimes in, "is the fact that the Administration recognizes the severe economic consequences of such a bad deal and yet still has sacrificed the jobs of thousands of chemical workers throughout the nation. [The Administration] apparently has ignored everything that has been presented by companies, by industry spokesmen, and by representatives of labor and has sacrificed American interests for obviously political reasons." The Manufacturing Chemists Association says that, from all indications, the U.S. chemical industry has much to lose and little, if anything, to gain from the Kennedy round agreement. Ditto, says Du Pont v.p. David H. Dawson, who claims the agreement not only will work to the detriment of the chemical industry but "to that of the nation's economy as a whole." Here is the basic complaint of chemical industry spokesmen: They argue that any gains in U.S. chemical exports which might be realized from a 20% reduction in E E C tariffs would be far overshadowed by the flood of chemical imports into the U.S. which will result from a 5 0 % cut in U.S. tariff rates. Moreover, they point out that, except for the ASP safeguard for U.S. benzenoid chemicals producers, tariffs are the only protection the do-
"The Administration . . . apparently has ignored everything . . . presented by companies, by industry spokesmen, and by representatives of labor and has sacrificed American interests . . •"
MAY ??. 1967 C&EN
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mestic chemical industry has. This is not true, they say, in the E E C , where tariff barriers are but a small part of the protection. There are a host of nontariff barriers to trade as well, such as turnover and border taxes. As Mr. Mahoney points out, "The EEC countries are already in the process of changing their border taxes which will more than offset even this minimum Kennedy round reduction in EEC's tariffs." He claims that U.S. companies selling in Europe likely will find the cost of entry of their products into the EEC higher than before. But it is the Administration's commitment under the Kennedy round to work for the abolishment of ASP that is the real sore spot with many chemical industry spokesmen, especially those who make benzenoid chemicals. SOCMA maintains that the converted ASP duty rates (based on foreign
"EEC countries are already . . . changing their border taxes, which will more than offset . . . this reduction in EEC's tariffs/'
value) developed last year by the Tariff Commission do not in many cases provide anything like the protection provided by ASP. In dyes, for example, the conversion alone reduces tariff protection by some 3 3 % , it maintains. If Congress abolishes ASP, this reduced duty then would be sliced in half. At the urging of the White House, Congress apparently will reserve judgment on the Kennedy round agreement until it has had a chance to study the package in detail. But the release of the initial sketchy details of the terms of the agreement failed to cause much of a stir in officiai Washington. Abroad, meanwhile, Germany's Verband der Chemischen Industrie says it is generally satisfied with the results, but has not yet studied them in detail. The Swiss chemical industry association says it is satisfied with the results, but that much depends "on the abolishment of the American Selling Price." The Italian chemical industry association will have no comment until it has had time to study the agreement in detail. The French industry trade group has no comment to date. In the United Kingdom, the Board of Trade plans to issue a White Paper June 19 describing the effects on U.S. tariffs, and has no specific comment at this time. British chemical management agrees generally that lower tariffs will help their exports, particularly to EEC, and will act as a spur to become more efficient. 22 C&EN MAY 22, 1967
Greeks start up big solar distillation plant on Patmos The big solar distillation plant on the Greek island of Patmos was dedicated during this month's Second European Symposium on Fresh Water from the Sea, in Athens. The unit, which supplies water for the town of Patmos, has an average daily output of 6864 gallons. The first large solar still, built in 1964 on the Greek island of Symi, produces an average of about 2000 gallons per day. Construction of the Patmos still was started last October. The cost of the plant, built with Greek government funds, was about $100,000. Design help was supplied by the Technical University, Athens. The Patmos facility does not use the large blackened basin typical of solar distillation units. Instead, it uses 71 small units arranged in three groups. Each unit is about 11 feet by 131 feet, and the basin is formed by concrete strips 3.1 inches by 3.9 inches. The bottom of the basin, inside the concrete strips, is earth lined with black butyl rubber sheeting. The cover is glass and is supported about 1 foot above the ground by an aluminum alloy structure. Sunlight passes through the glass and water and heats the black butyl sheeting, which then heats the water. The water begins to evaporate at about 25° C , and Dr. Delyannis says it gets as hot as 72° C. at high noon. Vapor condenses on the glass at the top of the still and runs into collecting troughs. The Patmos design gives good access to the central parts of the plant
Water expert Delyannis 6864 gallons per day
via a network of sidewalks, Prof. A. Delyannis of the Technical University said at the symposium. Also, the design lends itself to préfabrication—the more common large basin approach requires that most of the construction be done on the spot. The Patmos plant uses a sea water depth of about 0.78 inch. All piping and tubing, including valves and fittings, is made of polyvinyl chloride. Connecting flanges inside the still are polyethylene for better resistance to the high water temperatures in summer. The total area of the still, including paved sidewalks, is 130,000 sq. ft. Total evaporating area is 93,000 sq. ft. The daily average output of 6864 gallons is considerably increased, Prof. Delyannis points out, by using the surface of the still, including the sidewalks, as a rain collecting area. Rain completes the still output during the months of low solar radiation, keeping the average output over the year close to the still's maximum at high radiation values (about 13,000 gallons per d a y ) . Fresh water generated by the plant is collected in two underground reservoirs which are operated in sequence. This water is pumped to the community reservoir, and brine evacuated from the stills is returned to the sea.
Aerosols may snap back this year after a poor 1966 Production of aerosols in the U.S. may get back to its normal 15% growth rate this year, C&EN was told last week in Chicago by American Can Co/s Joseph H. Fredette during the 53rd midyear meeting of the Chemical Specialties Manufacturers Association, at Chicago's Drake Hotel. It will return to normal from a disappointingly low growth—only 1.9%—in 1966. How disappointing that figure is becomes apparent when viewed against the dramatic increase of 31.9% in aerosol production in 1965. What happened in 1966 was centered on two product areas, hair sprays and chocolate sirup drinks. Joe Fredette, who is also chairman of CSMA's aerosol product survey committee, sees a reversal of the trend this year, particularly in hair sprays. Output of all aerosols in 1966 totaled 1.835 billion units compared with 1.801 billion units in 1965. Food aerosol production totaled 69.6 million units, down 22.4% from the 89.8 million units made in 1965 (and the chocolate sirup drinks failure accounts for the sharp decrease). Household products aerosols advanced by 44.7 million units to a total of 531.1
