The chemical industry sees as a risk the beginning of negotiations between Mexico and China to achieve a commercial opening, a process that is already on the agenda, before which it asked the Ministry of Energy (Sener) not to be included, as it is not in chances to compete.
The president of the National Association of the Chemical Industry (ANIQ), Edmundo Rodarte, said that the concern of including China in the Asia-Pacific Trade Agreement is that that country is the largest manufacturer of chemical products worldwide with a strategy supported by decisions directly designed by a central government that has a special interest in its growth and development.
In this trade opening, another worrying issue is that a possible elimination of tariffs on South Korea is also on the table, which represents “a serious threat” for the chemical industry.
“The Mexican chemical industry is not in a position to compete head-on with any of these countries, since conditions such as the shortage of raw materials and modifications to the regulatory framework limit investments and our production capacity in the face of this structural weakness, we request to the Government of Mexico not to include the chemical industry as part of the decisions to open trade with these Asian powers as long as we do not solve the problem of supply of raw materials ”, declared Rodarte during.
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During the National Forum of the Chemical Industry, he stressed that the sector has gone through some difficulties due to the shortage of raw materials, but this has been exacerbated by the pandemic, which is why national production continues to decline and this is compounded by complications for imports from the energy sector.
The industry has suffered the effects of the economic slowdown caused by the health emergency with a contraction of 8.9% in GDP last year compared to 2019.
However, it managed to maintain its GDP share above 2%, ranking as the second most relevant industrial sector in the country.
“Despite our relevance and the effort dedicated to the production achieved last year, it was only enough to supply 24% of the national demand, so it was necessary to import 28.3 billion dollars, consequently the trade balance was in deficit by an amount of 20,300 million dollars, evidencing the enormous dependence that we have abroad to satisfy internal demand ”, highlighted Rodarte.
He explained that the lack of raw materials is mainly due to the significant reduction in the production levels of the inputs that Petróleos Mexicanos (Pemex) offers to the industry, such as ethane, propylene, ethylene oxide and ammonia, which are essential for the development of the main petrochemical chains.
With this scenario, the ANIQ proposed three solutions to the Secretary of Energy Nahle: first, to allow private industry to import ethane, propylene and ammonia, using Pemex’s infrastructure, covering storage and handling costs.
Second, to develop collaboration mechanisms between Pemex and private industry to restore supply and stop the contraction of the industry, and, third, to increase natural gas production in the south-southeast of the country and the availability of ethane.
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Import obstacles
The president of the ANIQ also highlighted the effects on the industry derived from the prohibition to renew import permits for a place other than the authorized one known as LDA, which was published on June 11 in the Official Gazette of the Federation.
He said that, according to a study carried out by a consulting company, 68% of the cargo imported by LDA is concentrated in the petrochemical, inorganic chemical and essential chemicals industry, so the impact for the industry will be gradually as the current authorizations.
This will affect more than 4 million tons of petrochemical raw materials with a value greater than 3,300 million dollars, negatively impacting a number of industrial sectors.
Finally, the chemical industry joined in expressing its concern about the electricity reform initiative, as it would seriously undermine the competitiveness and legal certainty of investments.
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