Meeting #

Meeting - Y2018

GPCA International Trade Committee

24th January 201814:00 – 17:00

1

34

1

Habrout & Lubaan meeting room,

Grand Hyatt, Muscat, Oman

Meeting OpeningChairman

2

Attendance Review

3

Total 13

Quorum needed 8

Confirmed 10

Tentative -

Regret 3

Awaiting response

-

# Member Organisation Confirmation

1 Mutlaq Al-Morished Tasnee Confirmed

2 Ahmad Al Saleh Equate Confirmed

3 Abdulrahman Essa Al Ateek Borouge Confirmed

4 Khalid S. Alohali Ma’aden Regret

5 Georgina Campbell Fyffe Integra Confirmed

6 Ziad Zarka Muntajat Confirmed

7 Faisal Al-Hajri Orpic Confirmed

8 Salahaldeen Al-Ansari PIC Confirmed

9 Maisa Al-Belushi Sadara Regret

10 Mohammed Taleb Sipchem Regret

11 Mathad Al-Ajmi SABIC Confirmed

12 Abdullah Al-Thowaini Tasnee Confirmed

13 Yaseer Fattah NATPET Confirmed

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

4

Agenda

5

# Agenda Item Objective Time Presented byPre-reading required?

1

Meeting opening & Administration• Welcome Note• Attendance Review • Agenda Review• Action Items Review

• Opening • Alignment

1330 – 1345Chairman &

Sec. Gen. -

2 Trade Defence Strategy Workshop • Update 1345 – 1400 Udit AroraWorkshop

Programme

3 Cross Committee Task Force • Update 1400 – 1420 Gina Fyffe -

4Regulatory Cooperation• Review of December Roundtable• Discussion on Next Steps

• Discussion• Alignment

1420 – 1450 All RT Report

Coffee Break 1450 – 1500

5New EU Antidumping Methodology and US Developments

• Discussion • Alignment

1500 – 1545 Charles Julien -

6Early Warning System• Potential Changes to Product List

• Discussion • Alignment

1545 – 1600 All -

7 Business Plan 2017 • Review 1600 – 1615 Udit Arora -

Agenda

6

# Agenda Item Objective Time Presented byPre-reading required?

8 Business Plan 2018 Brainstorm• Discussion • Alignment

1615 – 1655 All -

9

Meeting Closing• Any Other Business• Meeting Review• 2018 Meetings Calendar • Closing Remarks

• Closing• Alignment

1655 – 1700Chairman &

Sec. Gen. -

Trade Defense Strategy WorkshopUdit Arora

7

Cross-Committees Task-ForceGina Fyffe

8

TF Members

9

• Gina Fyffe, Integra (Chair)

• Saleh Al-Suwaiti, Tasnee

• Faisal Al-Hajri, Orpic

• Andre Kriel, Schmidt

• Marcel Duerkopp, Schmidt

• S. Lakshmanan, Schmidt

• Udit Arora, GPCA

Scope of Work

10

• Objective: Identify key pain areas and prioritise them according to their timelines

• Requirement: Securing buy-in from GPCA member cos.

• Output: White paper with a set of policy recommendations followed by the engagement and influencing of regulators

What does GPCA hope to achieve?

• GPCA seeks to influence regulatory updates on the basis of improvements in:

✓costs - reducing time at intra-GCC borders

✓safety – training and standardising of safety equipment on board trucks and trailers

✓environmental – decreasing GHG emissions

✓infrastructure – eliminating congestion at border check-posts

✓socio-economic output – enhancing growth opportunities for SMEs that in turn leads to job creation

Identified Pain Areas

11

• Licensing of vehicles – need for a common GCC number plate template

• Inconsistent HS Code systems – Each GCC country seems to have their own HS

code system that is inconsistent with the UN system

• Cross-border formalities – reducing costs by overcoming challenges raised by

cabotage

• Customs Inspections

• Paperwork/ bureaucracy – need to move to a paper-less system that saves

time, effort and reduces the chances of corruption

• Lack of common sense? – If the system doesn’t allow it, the authority seems

unable to take a sensible call

• Lack of education and training that lead to inconsistent interpretations

• Container repositioning

Project Plan

12

Licensing of vehicles:

a. Research the truck and trailer standards in the GCC and benchmark against EU

i. Cross-check with the Gulf SQAS Committee - Udit

ii. Check with colleagues in Europe – Marcel

b. Develop white/ position paper with a set of policy recommendations advocating the harmonisation of license plates

c. Gather support from RC & Gulf SQAS Committees

a. Engage with regulators (Standards authorities) to advocate

Regulatory CooperationUdit Arora

13

Review of Roundtable

14

• Attended by key regulators, GPCA Board Members and ITC Members

• GPCA showcased the importance and benefits of FTAs for the GCC

industry and larger economy

• Regulators agreed to seek support from GPCA when they negotiate

FTAs and other trade deals

• Dialogue was positive and a number of areas were identified where the

industry and regulators can work collaboratively

Next Steps?

15

Outcomes from the discussions are listed below:

1) Discuss and align on the legal obligations of FTAs

2) Raise awareness amongst relevant regulatory departments to demonstrate the boost in economic growth attached with FTA agreements

3) Liaison between GPCA & GCC regulators: a) Monthly meetings/ communications and annual/ bi-annual workshops

b) Regulators to be invited to attend ITC meetings and events

c) An Industry/ SME expert to be hired within the team

d) Establish a joint committee to work collaboratively on key issues. Conduct comprehensive background research, due diligence & transparency and based on that focus on key priorities

e) Designate one ITC member from each country to be liaison with respective authorities

4) Sanction a comprehensive study to highlight the most important trade barriers to GCC industry (gap analysis)

5) Make GPCA petrochemicals database available to regulators

6) Need for Standardization

7) GPCA to be engaged during negotiations of agreements w/ trading blocs

New EU Antidumping Methodology and US DevelopmentsCharles Julien

16

Early Warning SystemAll

17

Current List

18

# Products HS Code Importing Countries

1 Urea 3102 10 Australia

2 Methanol 2905 11 Brazil

3 Ethylene Glycol 2905 31 China

4 HDPE 3901 20 European Union

5 LLDPE 3901 10 India

6 PP 3902 10 Japan

7 MTBE 2909 19 Malaysia

8 Ammonia 2814 10 Pakistan

9 P-xylene 2902 43 South Africa

10 South Korea

11 Thailand

12 Turkey

13 USA

Business Plan 2017Udit Arora

19

ITC Themes

20

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 Achieved Partial Success/ Ongoing Not Achieved

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 (Ahmad, Yaser, Ziad,

Mathad, Udit)

Develop a white paper on the

importance and value of tariff

elimination on GCC

Petrochemical Export.

Communicate the proposal to

GPCA board for support and

action

GPCA to hold a session during the AF/ AGM

to highlight and promote this in addition to

other ITC recommendations (Ahmad, Yaser,

Ziad, Mathad, Udit)

Develop a presentation aiming

to receive feedback and

establish consensus among

GPCA members

CEOs to represent GPCA by engaging

respective authorities to promote key

market FTAs and its positive impact on GCC

petrochemical Industry

Schedule CEOs meetings

(those who accepted to carry

personal interaction) with

respective authorities

Post Meeting Follow ups

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

22

23

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

Introduction to ERP System

Trade Defense Strategy

Early Warning Detection System Phase 2

Risk of market access from trade

perspective during project feasibility

phase

Understanding of objectives and practice

of TDI in current economic context

1. Proposed Enhancements to EWS

MMR

2. Draft of Monitoring Guidelines (assess

trade remedy risk based on MMR)

Theme 2: Trade System and Best practices

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

Theme 2 Achieved Partial Success/ Ongoing Not Achieved

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 (Mathad)

Workshop hosted for ITC

members, facilitated by SABIC

(Mathad)

Risks of market access from trade

perspective during project feasibility phase

(Peri)

Not achieved

Trade Defense strategy for GPCA members

(Mohd. Taleb)

- Understanding of objectives and practice

of TDI in current economic context

Trade Defense Strategy

Workshop

Early Warning Detection System (EWS)

Phase 2 – enhance use of the EWS to

determine actions companies should take to

protect against warnings (Ziad)

Actions were distributed

amongst members

Theme 2: Trade System and Best practices

24

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 Achieved Partial Success/ Ongoing Not Achieved

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) (Ahmad,

Yaser, Udit)

1. Develop a white paper on

the importance and value of

tariff elimination on GCC

Petrochemical Export

2. Communicate the proposal

to GPCA board for support

and action

Reach out to ICCA to cooperate on trade

improvement topics with local Government

(Udit)

Develop and conduct a

workshop between GPCA and

ICCA on the topic of trade policy

cooperation practices

Assess the competitiveness of the trade

value chain (i.e. cross border trade cost in

GCC) (Gina)

Reach out to supply chain

committee for common trade/

supply related topics to

improve the value chain and

reduce cost

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

26

Business Plan 2018 BrainstormAll

27

Meeting CloseChairman and Sec. Gen.

28

Thank you Orpic!

29

2018 Calendar

30

# Event Date

1 International Trade Committee Meeting 1/Y2018Wednesday, 24th January 2018,

Muscat

2 Trade Defence Strategy WS Thursday, 25th January 2018, Muscat

3 International Trade Committee Meeting 2/Y2018 Sunday, April 22, 2018

4 International Trade Committee Meeting 3/Y2018 Thursday, 18th October 2018

6 GPCA Annual Forum Monday – Wednesday,

26th-28th November 2018