Meeting #

Meeting - Y2017

GPCA International Trade Committee

1

22nd May 201710:30 – 16:00

32

2

GPCA Offices, Business Bay,

Dubai, UAE

Meeting OpeningChairman

2

Abdulrahman Essa Al Ateek, Borouge

3

• Acting Senior Vice-President, Corporate Affairs

• Has held several roles at Borouge over the last

12 years in Quality Management, Business

Intelligence & Supply Chain

• Bachelor of Science, Mechanical Engineering,

University of Texas at Austin

• Member, American Society of Mechanical

Engineers

• IMD Leadership Development Program

• QMS Internal Auditor Certificate ISO 9001

• EMS Internal Auditor Certificate ISO 14001

Yaser Al-Fattah, Natpet

4

• Director – Special Projects

• Has held several roles at Natpet and the Banking

industry over the last 35 years in Project

Management and Sales & Marketing

• Bachelor of Business Administration, Marketing,

University of South Florida

• Advance Managment Program (AMP) in Business

Administration and Management, General,

INSEAD

Attendance Review

5

Total 13

Quorum needed 9

Confirmed 8

Tentative 0

Regret 5

No response -

# Member Organisation Confirmation

1 Mutlaq Al-Morished Tasnee Regret

2 Ahmad Al Saleh Equate Confirmed

3 Abdulrahman Al Ateek Borouge Confirmed

4 Periyanayaham M. Farabi Regret

5 Georgina Campbell Fyffe Integra Regret

6 Ziad Zarka Muntajat Confirmed

7 Yaser Fattah Natpet Confirmed

8 Faisal Al-Hajri Orpic Confirmed

9 Salahaldeen Al-Ansari PIC Regret

10 Maisa Al-Belushi Sadara Confirmed

11 Mohammed Taleb Sipchem Confirmed

12 Mathad Al-Ajmi SABIC Confirmed

13 Abdullah Al-Thowaini Tasnee Regret

Do Don’t

Ensure strict compliance to the following steps to minimize the risk of violating competition laws

Prior to meetings:

• Draft detailed agenda that accurately reflects what is to be discussed. Agenda and meeting documents must not include issues relevant to competition law

During meetings:

• Limit discussions to topics included on the agenda• Take minutes of the full meeting• In case of spontaneous statements relevant to

competition law, react immediately and actively dissociate yourself from the violation:

o Point out to participants that this issue must not be discussed

o If necessary, postpone the discussion until you have received relevant legal clarifications

o If the discussion continues, notify your objection in the protocol, suspend the meeting or leave the meeting space

o Inform the GPCA Secretary-General or your company about the incident

After meetings:

• Minutes of meetings should be short and straightforward

Discuss, formally and informally, exchange information

about or reach agreement with competitors about:

Prices:

• Pricing, price differentials, and pricing strategies

• Individual sales and payment terms, individual discount, credits and credits conditions

Production:

• Production capacity, design plans, production rates, production methods and proposed changes thereto

Transportation:

• Rates or rate policies for shipments, including zone prices and freight charges

Future Market Behavior, in particular:

• Plans of individual companies concerning technology, investment, design, production, distribution and marketing of certain products

• Agreement on market allocation either geographically or by costumers

• Matters related to actual or potential suppliers or customers, particularly if this might have the effect of excluding them from any market or influencing the business conduct of other companies toward them

Meeting Protocol

6

Agenda

7

# Agenda Item Objective Time Presented byPre-reading required?

1

Meeting opening & Administration• Welcome Note• Attendance Review• Agenda Review• Introduction of New Members

• Opening • Alignment

1030 – 1040Ahmad Al-Saleh

& Sec. Gen. -

2 Business Plan 2017 • Update 1040 – 1140 TF Leaders -

3India Service Tax – Strategy Formulation

• Discussion 1140 – 1150 All -

4EU-Turkey Tariff Suspensions & Quotas – Strategy Formulation

• Discussion• Alignment

1150 – 1220 All -

5

The Proposed Reform of the EU Trade Remedy Instruments: Increased Risks for Exports of Chemicals from the GCC

• Presentation• Discussion

1220 – 1300 Charles Julien -

Lunch 1300 – 1345

6Early Warning System – Proposed Changes

• Alignment 1345 – 1415Charles Julien,

Ziad Zarka-

Agenda

8

# Agenda Item Objective Time Presented byPre-reading required?

7GCC Free Trade Agreements: Potential Benefits and Challenges for the GCC Chemicals Industry

• Presentation• Discussion

1415 – 1450 Charles Julien -

8GCC FTA developments with China and Turkey

• Discussion 1450 – 1500 Ahmad Al-Saleh

9WTO Public Forum “Trade: Behind the Headlines” – GPCA Participation

• Discussion• Alignment

1500 – 1520Ahmad Al-Saleh

&Yaser Fattah

-

10Regulatory Workshop – November 2017

• Discussion• Alignment

1520 – 1550 All -

11WTO Anti-Dumping Meeting in Geneva

• Update 1550 – 1555 Ziad

12

Meeting Closing• Any Other Business• Meeting Review• 2017 Meetings Calendar • Closing Remarks

• Closing• Alignment

1555 – 1600Ahmad Al-Saleh,

Sec. Gen. & Udit Arora

-

Business Plan 2017TF Leaders

9

ITC Themes

10

1. Advocate for removal of tariff and non-tariff barriers that affects GCCPetrochemical Industry negatively

2. To facilitate the sustainable growth of the GCC regional petrochemical andchemicals industries through adoption of cost effective and efficient tradesystem, policies measures at best practices

3. To promote co-operation on policies that improves the trade flow of GCCpetrochemical and chemical products

Theme 1: Advocate for Removal of TBs & NTBs that affect the GCC Petrochemical Industry Negatively

12

Action Task Owner Deadline Requirements

1) GPCA should develop Policy

recommendations to be shared with

relative GCC authorities. Policy paper

should highlight benefits including

contribution to national GDP, jobs

etc. of resuming and/ or initiating

negotiations on FTAs with key

markets

Develop an economic analysis on

direct and indirect benefits

sought from FTAs &/ or

plutilaterals

Yaser A. Fattah TBD

GPCA

management

to outsource

this task

Draft a policy recommendation

white paper (English/ Arabic)Mathad Al-Ajmi

TBD

GPCA

management

to outsource

this task e.g.

K&S

2) GPCA to hold a session during the

AF/ AGM to highlight and promote

this in addition to other ITC

recommendations

Develop a presentation aiming to

receive feedback and establish

consensus among GPCA

members.

AbdulAziz

BabikerTBD

3) GPCA members represented by CEOs

to engage with respective authorities

to promote the benefits of key

market FTAs and its positive impact

on the petrochemical industry in GCC

Schedule CEOs meetings (those

who accepted to carry personal

interaction) with respective

authorities

GPCA SG

Yaser A. Fattah

Other ITC

members

TBD

Post meetings follow-ups

GPCA SG

Yaser A. Fattah

Other ITC

members

Priority: Support and urge the GCC governments to conclude free trade agreements of EU, UK, Turkey, US and China

Theme 2: Trade Systems and Best Practices

14

Owner Theme 2 Specifics Deliverable

Due Date

Update Remaining Actions

Mathad Al-

Ajmi

Use of ERP systems by the likes of SABIC to

monitor if each shipment is complying with

Anti-Dumping regulations in the destination

country was discussed

TBD SABIC is willing to

participate in a workshop

to share its experience

and its Anti-Dumping tool

to GPCA members

Agree with other members

on a suitable time to conduct

the workshop

Peri Risks of market access from trade perspective

during project feasibility phase

TBD See slide See Slide

Mohd. Taleb Trade Defense strategy for GPCA members TBD Understanding of

objectives and practice of

TDI in current economic

context

Formation of “standing sub-

committee” to develop GPCA

action plan to address at

source (before TDI action

taken)

Ziad Zarka Early Warning Detection System (EWS) Phase

2 – enhance use of the EWS to determine

actions companies should take to protect

against warnings

1. ITC Meeting

2. 30 Nov 2016

1. Proposed

Enhancements to EWS

MMR

2. Draft of Monitoring

Guidelines (assess

trade remedy risk

based on MMR)

1. Agree on enhancements

and cost

2. Issue draft

Priority: Facilitate sustainable growth of the GCC petrochemical and chemicals industry through adoption of cost

effective and efficient trade systems, policy measures and best practice

1. Initial appraisal of a European Commission Impact Assessment European Commission proposal on the modernisation of trade defence instruments

Trade Defense Strategy For GPCA Members

15

1. Trade Defense strategy needs to be rethought in light of:

a) Current and sustained oil price slump and negative impact on global economy

b) Shift of feedstock competitive advantage from ME producers

c) Strategies to lessen reliance on oil revenues

2. EU thinking has the following objectives in relation to its proposals to revise TDI practice₁ :

a) to create a trading environment in which industries (and by implication their workers) are able to compete on the basis of their genuine competitive advantages and make sure that they can make full use of the instruments legally at their disposal to restore a level playing field

b) to allow users and consumers to benefit from imports based on the genuine competitive advantages of foreign suppliers

c) to increase confidence and awareness in the EU's TDI system among all stakeholders, including among small and medium enterprises

d) to improve the level of cooperation of all stakeholders concerned in TDI proceedings

e) to preserve the existing balance of interests between producing and importing interests

3. Co-ordinated program at GPCA level required to stop imposition of TDI at source

Risks Of Market Access From Trade Perspective During Project Feasibility Phase

16

1. GCC regional Project Development, Deployment and Execution Strategies do not

always capture all relevant trade and market access parameters early enough in the

project timeline. Project sponsors are often courted by prospective technology

vendors and offtake partners eager to partner but not necessarily providing full and

frankly assessed target market segmentation from a regulatory perspective

2. The early phases of project development and the amount of front-end loading that

can be accomplished from both technical and commercial perspective are usual

indications of the degree to which project can be brought in against performance and

budgetary expectations. The same is true of market access risk assessment and

becoming fully acquainted with the issues that govern that commodities particular

acceptance into a particular market

3. Prospective business partners delivering so-called market access may deliver a ‘can-

do’ attitude during the project feasibility that may not bear the level of success

initially touted if the additional imports of said commodities tips the demand balance

into over supply prompting local producers to call for trade remedy response

Risks Of Market Access From Trade Perspective During Project Feasibility Phase

17

Required is:

(i) better understanding of the target market users and assessing and leveraging their

prospective influence on the likely outcome of changes to a particular markets

supply & demand balances with the effect of the prospective project trade addition;

(ii) Deeper understanding of such changes by knowing the market, getting perspective

from relevant local commercial trade and consultative organizations at the project

feasibility stage will help improve the decision quality as feasibility stage progresses

from conception to execution

Enhancements to Early Warning Systems

18

1. Volume of imports

• Negligible imports - Use a different code when the volume of imports is negligible, i.e., less than three percent of total imports, and the risk of a trade remedy proceeding is thus close to nil – US$500 per month

• Other imports/ total imports - systematically report the volume - and value - of other imports and total imports and assess their trends. Imports from the main competing countries may also be monitored – US$500 per month

2. Value of imports - monitor the trends in the average unit value over time and in comparison to the average unit value of other imports – US$750 per month

3. Trade remedy proceedings - add a sub-section for each product with basic information regarding trade remedy measures in force, on-going investigations and past proceedings – US$250 per month + US$8,500 one time

4. Electronic report - provide all tables in electronic version, i.e., in Excel, to facilitate the use and analysis of the statistical data extracted – US$2,500 one time

5. Add more products? Which ones?

Theme 3: Cooperate on policies to improve trade flow of GCC petrochemicaland chemical products

Priority: Increase awareness across the GCC Industries and Government bodies of

synergies and opportunities within the industry to optimize and enhance trade flow.

Context

Challenges

Value

Raising the awareness of government bodies and

industries on current and potential trade challenges to

enhance the dialogue on cooperation to improve trade

policies within the GCC.

Suggested actions

3.1 Conduct and facilitate a round table exchange

meeting within the GCC with respect to GCC Trade

Improvements;

Address common topic (i.e. product diversification,

logistical challenges, GDP contribution, Job creation…etc)

3.2 Reach out to ICCA to cooperate on trade

improvement topics with local Government.

3.3 Assess the competitiveness of the trade value chain

(i.e. cross boarder trade cost in GCC).

Increased global capacity and self sufficiency of

traditional export market will lead to protectionism and

pressure on volumes and margins

Continue sustainable economic growth and job creation

across GCC by growing the businesses and leading to

petrochemical downstream industry developments, and

enable innovation.

Theme 3: Cooperate on policies to improve trade flow of GCC petrochemical and chemical products

20

Priority: Increase awareness across the GCC Industries and Government bodies of synergies and opportunities within the

industry to optimize and enhance trade flow

Task Owner Deadline Requirements

3.1 Conduct and facilitate a round

table exchange meeting within

the GCC with respect to GCC

Trade Improvements;

Address common topic (i.e.

product diversification, logistical

challenges, GDP contribution, Job

creation…etc)

Develop a white paper on the

importance and value of tariff

elimination on GCC Petrochemical

Export

Maisa/ Ahmad Q1 2017

Communicate the proposal to GPCA

board for support and actionITC Chair Q2 2017

3.2 Reach out to ICCA to

cooperate on trade improvement

topics with local Government

Develop and conduct a workshop

between GPCA and ICCA on the topic

of trade policy cooperation practices

Ahmad/ Udit Q1 2017

3.3 Assess the competitiveness of

the trade value chain (i.e. cross

border trade cost in GCC)

Reach out to supply chain committee

for common trade/ supply related

topics to improve the value chain and

reduce cost

Gina Q4 2016

India Service Tax – Strategy FormulationAll

21

India Service Tax

22

• “Either 4.5% Service tax on the freight value, on behalf of vessel owners

(to the charterer/receiver account obviously) OR 1.4% of the CIF value,

where the Freight value cannot be established…”

• Importer is responsible to discharge the Service Tax liability

• In effect – 28th April 2017

EU-Turkey Tariff Suspensions & Quotas –Strategy FormulationAll

23

January 2018 Round

24

• Between the Jul’14 and Jan’17 Rounds, EU and Turkish users of

polyethylene and polypropylene filed tariff waiver requests with the

support of GPCA and/or its members

• For the Jan’18 Round, no requests for tariff suspensions or quotas for

polyethylene or polypropylene have been filed

• Action required: Agree on a strategy for which products GPCA should

file waiver requests for

The Proposed Reform of the EU Trade Remedy Instruments: Increased Risks for Exports of Chemicals from the GCC Charles Julien

25

EWS – Proposed ChangesCharles Julien & Ziad Zarka

26

GCC Free Trade Agreements: Potential Benefits and Challenges for the GCC Chemicals IndustryCharles Julien

27

GCC FTA Developments with China and TurkeyAhmad Al-Saleh

28

WTO Public Forum “Trade: Behind the Headlines” – GPCA ParticipationAhmad Al-Saleh & Yaser Fattah

29

Most Recent WTO Public Fora

30

• 2016 – Inclusive Trade -

https://www.wto.org/english/forums_e/public_forum16_e/public_forum1

6_e.htm#programme

• 2015 – Trade Works -

https://www.wto.org/english/forums_e/public_forum15_e/public_forum1

5_e.htm

• 2014 – Why trade matters to everyone? -

https://www.wto.org/english/forums_e/public_forum14_e/programme_e

.htm

• 2013 – Expanding trade through innovation and the digital economy -

https://www.wto.org/english/forums_e/public_forum13_e/programme_e.

htm

Regulatory Workshop – November 2017All

31

WTO Anti-Dumping Meeting in GenevaZiad Zarka

32

Meeting ClosingChairman

33

2017 Calendar

34

# Event Date

1 Regulatory Cooperation & Capacity Building WSSunday-Monday, 29th-30th

January 2017

2 International Trade Committee Meeting 1/Y2017 Monday, 30th January 2017

3 All Committees MeetingSunday, March 12, 2017

14:30 – 17:00 (Dubai, UAE)

4 International Trade Committee Meeting 2/Y2017 Monday, 22nd May 2017

5 International Trade Committee Meeting 3/Y2017 Thursday, 19th October 2017

6 GPCA Annual Forum Monday – Wednesday, 27th-29th November 2017

Closing RemarksChairman

35