Trade barriers cannot alter the petrochem strengths of the Gulf region

Trade barriers cannot alter the fundamental reality of the region’s long-term comparative advantages that will enable it to be the world’s hub for petrochemicals production, said Saudi Petroleum and Mineral Resources Minister Ali bin Ibrahim Al-Naimi. Addressing over 1,100 delegates at the Fourth Annual GPCA Forum in Dubai, he said the Gulf region’s advantages were based on geography, natural resources, and an already well developed production, refining and chemicals manufacturing infrastructure. Neither the recession of 2008 nor any protectionist measures by parties outside the GCC region can alter Gulf’s fundamental petrochemical strengths which is poised to become the hub for more sophisticated downstream products. In this regard, it is strategically and economically in the best interest of GCC producers to develop and expand their domestic markets. A vibrant and growing domestic market that provides stability of demand also reduces costs for transportation and mitigates the effects of trade barriers.” The petrochemical producers in the Gulf region export significant volumes of their products to more than 100 countries around the world. “It is very important for our industry to have access to the world’s market unfettered by artificial trade barriers. There is a concern that deglobalization is a growing threat and could result in restrictions of world trade. He pointed out that the recent recession had further complicated the Doha trade round of the World Trade Organization which has been languishing for over seven years. Currently there is a serious con-cern and some hard evidence that protectionism will gain strength. Gulf petrochemical producers are long-term players, aiming to deliver affordable products to world consumers. It is certainly in our interests to work to maintain open markets and to support efforts to re-energize the Doha negotiations. Al-Naimi urged the Gulf chemicals industry to redouble its efforts for environmental stewardship, corporate social responsibility, training and employment, promoting R&D to support new technologies and small business development, and best practices in safe operations and corporate governance. Mohamed H. Al-Mady, chairman of GPCA and vice chairman & CEO of Sabic, said that the center of economic gravity was shifting from the West to East, and cited the increasing role being played in global economic affairs by Group of 20 now as against the Group of 8 in earlier days. “Whereas the G-8 had only one Asian member, Japan, the G-20 now includes China, Japan, India, South Korea, Indonesia and Australia – a total of six Asian members.”