CEO Panel: “Towards an Energy Transition”
39th APLA Annual Meeting, Buenos Aires, November 2019
CEO Panel Theme 4: Chemical Global Trade
Moderator: Marcos de Marchi, CEO, Elekeiroz / Chairman of the Board, ABIQUIM
What recommendations would you make to the World Trade Organization regarding chemicals trade?
A very important point is to recognize that chemical products represent a very relevant trade between countries and that they have a significant impact on many industry sectors. Apart from this, we must also understand that, in some cases, there are significant distortions in the cost of raw materials and energy, and that affects competitiveness. The challenge is how to combine the two aspects so that there is an important trade between the regions and so that the conditions of competition are fair and everyone can add value to their economies. The tension between the United States and China is a good example of the impacts that some unilateral actions may have on world trade.
Fernando Musa, CEO, Braskem
From the point of view of the WTO and thinking of Latin America, it is important to position the economic blocs, such as Mercosur or Latin America in general. That is where the competitive advantages we have as a bloc can be presented. In the case of initiatives such as reducing tariffs to increase the competitiveness of countries, it is very important to take into account existing distortions, and the time of implementation of these changes has to consider the reduction and elimination of these distortions. This impacts the tax aspects, financing and the support that government agencies provide to different industries.
Diego Ordóñez, President, DOW Argentina and Latin America South Region
Daniel González, CEO, YPF
We only have operations in Argentina, but I agree on the importance of working as a regional bloc. Organizations such as the WTO should encourage investments to happen in those places that offer competitive advantages for businesses, and not in those countries where there are certain distortions, for example of a tax or regulatory nature.
The most important challenge, especially in Colombia for our location, is that the shale gas in the United States is very disruptive, because they can have the most economical gas, the most economical energy and the most economical raw material. The United States sets the market price, and this is a very big challenge, because we see that in Latin America gas is expensive, electricity is scarce and often times you have to import the raw material. Then, we see what is happening in China, where refining and petrochemical complexes are being built in record time, and they have a large logistic capacity. This poses challenges for Latin America, but also opportunities. Our countries, with the exception of Brazil, are small, but if we join forces and improve our logistics and our efficiencies, we could achieve better imports and consolidate as a region.