European Commission Directorate-General for Trade

Chemicals

For information on the pharmaceuticals sector, see Pharmaceuticals

• EU chemicals exports in 2009: €118 billion
• EU chemicals imports in 2009: €75 billion
• Biggest markets for EU chemical exports: US, Canada, Switzerland, Asia
  (China, India, Japan and ASEAN countries)

The chemicals sector is one of Europe's most competitive industrial sectors. Its work is focused on the manufacture of chemicals and the chemical transformation of materials into new substances or products. It covers a huge range of operations from basic organic and inorganic chemical products, through fertilizers, basic plastics, synthetics, rubbers, paints and varnishes to highly specialized consumer chemicals and polymers.

Accounting for around 30% of the total world chemicals production, the European Union is the world's most important producer of chemicals. In 2008 it produced €566 billion worth of chemicals. More than one third of world's top thirty chemical companies have their headquarters in the EU. The largest European producer of chemicals is Germany, which accounts for about 25% of EU production. Around 30,000 chemical companies employ a total staff of about 1.2 million people in the EU. Another three million employees work in sectors using output of the chemical industry and thus depend on its competitiveness.

In 2008, the EU chemical industry contributed to improve the EU's trade balance with a trade surplus of nearly €43 billion. The EU trades now more than 40% of all chemicals traded globally, compared with circa 15% for the NAFTA countries and circa 30% for Asia.

EU Trade policy helps maintain and develop a successful chemical industry in Europe by tackling the many barriers to trade that European chemical companies still face in some of their biggest markets. Some of the large emerging economies continue to maintain prohibitively high tariff barriers for chemicals. EU exporters are also often confronted with a number of non-tariff obstacles, including complex and discriminatory standards and technical regulations governing chemicals, weak Intellectual Property Rights protection, and unnecessary, burdensome or costly testing, registration, licensing and certification procedures.

EU companies can also find themselves disadvantaged by the double-pricing of raw materials, in which raw materials are provided to local producers for lower prices than they are to foreign companies. This provides an obvious unfair competitive advantage and is of particular concern to the EU chemicals industry. Through its bilateral trade negotiations the EU is pushing for the ending of such discriminatory treatment.

By contrast, the EU market is generally very open for chemicals, with comparatively low tariffs. EU tariffs for chemicals are harmonised at 0%, 5.5% and 6.5% under the Chemical Harmonisation Tariff Agreement reached during the Uruguay Round of world trade negotiations.

In order to address the issues above, the European Commission, the Member States and the representatives of the industry concerned, together with other stakeholders (civil society and the academic world) have been deliberating in the course of 2008 in the framework of a High Level Group on the competitiveness of the Chemicals Industry on specific recommendations, among others in the trade policy field, to preserve and enhance the sectors' global competitive position. These recommendations, adopted in February 2009, put forward action in areas such as the further multilateral and bilateral decrease of tariffs (including export duties), the enhancing of access to third countries' markets and products (including raw materials), or the impact of the regulatory and customs environment on the external competiveness of the chemical business.

The financial crisis has also affected the chemicals industry, since the sector is at the upstream of other manufacturing processes. Various chemical sub-sectors were hit to a different degree, some strongly. Overall, the downturn in economic aggregates seems to have reached the bottom in December 2008, and since that time, production has been experiencing a recovery, with some subsectors still faring worse than others.

• Further information on Market access database.
• More about the developments related to the High Level Group meetings on EU Enterprise and Industry.

Cosmetics products

The EU cosmetics and perfumes industry market volume, based on retail sales prices at the point of sales, amounted to nearly € 69.5 billion in 2009, compared to the US (€41 billion) and Japan (€ 21.7 billion). The sector provides employment for about 500 million people, whereby 150,000 are directly employed by the cosmetic industry and another 350,000 indirectly in retail, distribution and transport segment.

Total exports sales for the industry reached € 11.7 billion for 2008.

The main destinations for cosmetic exports are the US, Russia, Switzerland and Japan.

Figures provided by Eurostat and COLIPA.

Tariffs

Within the EU tariffs are very low, but remain high) in a number of countries where they constitute an obstacle to increasing exports. As cosmetics belong to the chemicals sector in a wider sense, the Chemical Harmonisation Tariff Agreement (CHTA) applies to the EU and to other participants (foreseeing a zero for zero duty among its members), the main objective is to reduce tariffs and convince other countries to join CHTA.

Non-tariff barriers

As cosmetics remain luxury goods with high price levels, the removal of the main non-tariff barriers would probably boost European sales in export markets as living standards continue to rise. Amongst others, the main non-tariff obstacles are related to registration (labelling) and certification (testing) where technical barriers allegedly justified by human health care, constitute an impediment to trade.

COLIPA (The European Cosmetic Toiletry and Perfumery Association) represents the sectors interests.

• Further information on the chemical sector in Market access database
• Find out more about Enterprise and Industry