Public
FTAA.soc/civ/104
September 18, 2003

Original: English
 

FTAA - COMMITTEE OF GOVERNMENT REPRESENTATIVES ON THE PARTICIPATION OF
CIVIL SOCIETY

CONTRIBUTION IN RESPONSE TO THE OPEN AND ONGOING INVITATION
 

Bayer Polymers

June 3, 2003

Chair of the Committee of Government Representatives on the Participation of Civil Society
Secretaria del Área de Libre Comercia de Las Américas (ALCA)
8 Oriente N^o 1006
Paseo San Francisco
Centro Histórico, Puebla 72000
Mexico

Re: Request to the Negotiating Group on Market Access for Immediate FTAA-wide Elimination of Tariffs on Polycarbonate (HTS 3907.40)

Dear Sir or Madam:

Bayer Corporation (“Bayer”) welcomes the opportunity to respond to your Open Invitation to Civil Society in FTAA Participating Countries and contribute its views to the Committee of Government Representatives on the Participation of Civil Society. Bayer directs its comments to the Negotiating Group on Market Access and respectfully requests reciprocal immediate tariff elimination on polycarbonate (HTS 3907.40) as a key objective of market access negotiations for a Free Trade Area of the Americas (“FTAA”).

About Bayer and the US Industry

Bayer, headquartered in Pittsburgh, Pennsylvania, markets a wide variety of health care and chemical products and is a wholly-owned subsidiary of the Germany-based Bayer Group. Other major US polycarbonate manufacturers include GE Plastics and Dow Chemical. Combined, the industry operates manufacturing facilities in the states of Alabama, Indiana, and Texas.

About Polycarbonate

Polycarbonate is a high-performance resin used to manufacture products with diverse applications, including optical, medical, automotive, and electronic equipment. For example, polycarbonate is a key component used to manufacture blood dialysis equipment, compact discs and DVDs, and bottles and containers.

Tariff Elimination Benefits All FTAA Countries

Reciprocal and immediate FTAA-wide elimination of polycarbonate tariffs would result in widespread benefits for all member countries. Manufacturing in the optical, electronics, and health care industries stand to benefit directly, resulting in the creation of thousands of well-paying jobs. Competitive polycarbonate costs will also improve: (1) the competitive position of FTAA-member country exports in world markets; and (2) the competitive position of domestic production in these same products relative to non-FTAA imports, such as those from Europe and Asia. Western Hemisphere consumers will also greatly benefit from competitive prices on electronic, optical, automotive, and health care equipment as well as containers.

High Hemispheric Tariffs Discourage Value-Added Manufacturing

High hemispheric polycarbonate tariffs constitute a substantial barrier to the numerous downstream industries in FTAA countries that utilize polycarbonate. 2002 MFN tariff rates on polycarbonate in selected FTAA countries range from 5% in Colombia up to 15.5% in Brazil. A patchwork of preferential systems can significantly reduce the polycarbonate tariff in intra-FTAA trade or eliminate it completely. For example, polycarbonate imports from FTAA countries enter the US duty-free under NAFTA and other preferential trade programs. All intra-Mercosur trade is likewise duty-free; however, non-Mercosur imports face the 15.5% MFN tariff. These preferences notwithstanding, a patchwork system that keeps some rates high and others low is highly inefficient and should be replaced with uniform duty elimination. Notably, of the 34 FTAA negotiating partners, five countries - Argentina, Brazil, Canada, Mexico, and the United States - currently produce polycarbonate.