Overview:
This White paper will provide an overview of the variety of business support that can be provided through various trade advocacy channels (including direct negotiations, government to government dialogues and others).  Positive impact would range from reduction of tariffs, improvement to country legal/investment structure to reputational support through increased visibility for Dow’s global contributions to developing countries.  In all cases, success will require coordinated government affairs advocacy in-country, through trade associations and with bilateral partner governments (i.e., Washington, DC) as well as engagement by country/regional leadership.

1.  Trade Negotiations:
Governments negotiate trade agreements on 3 levels –

Multilateral – embodied currently in the WTO Doha Round negotiations.  Dow’s key interest in Doha would be a chemical sectoral tariff elimination agreement which would encompass all major chemical producer countries (over $3B in production) and require a reduction of tariffs (for developed countries – zero; for developing – likely 95% at zero, with 5% remaining in a protected, longer-term phase out)

Regional – negotiating as a bloc/economic entity (i.e., Gulf Cooperation Council, European Union, Area of South East Asian nations) with other single and regional partners.  Regional agreements tend to be less detailed and of longer time frame (due to the complexities of negotiating as a bloc.  For example, the EU and GCC have been negotiating for 15 years with no clear deadline for completion)

Bilateral – the most definitive and accessible for influence due to the nature of two specific governments negotiation substantially all trade flows (required by WTO rules).  In this case, Dow can usually leverage participation on both sides of the agreement (i.e.,  Saudi Arabia – India).  In addition to Free Trade Agreements (FTAs), there are a number of other bilaterals, including US-driven Trade & Investment Framework Agreements (TIFAs) and Bilateral Investment Treaties (BITs) which are precursor agreements, designed to build capacity for an FTA by establishing higher quality rules for investor protection, prevent against double taxation treatment for investors and facilitate customs and other bureaucratic processes.

2. “Strategic” Partner:
The majority of Dow’s business strategy involves investments and increase in presence in key developing countries, many of which still have very strong state controls over the economy.  Government is in fact the partner, customer, regulatory and oversight entity for Dow’s growth – necessitating a strong, mutually supportive relationship.

One of the opportunities for Dow to establish that relationship is to focus on strategic policy engagement opportunities, such as business counterparts to government-to-government dialogues.  Washington and Brussels in particular have created a number of key Strategic Economic Dialogues with other countries.  For example, the US-India Strategic Dialogue is partnered with a US-India CEO Forum (ANL currently participates).  The company can distinguish it’s strategic value further by helping to advance key country investments in world capitals (i.e., the Saudi Arabian WTO Accession; the Indian Civil Nuclear Engineering Deal, Libya/Lautenberg Amendment etc). 

This visibility providers Dow access at the highest levels of key government as well as establishing the company’s global presence, level of influence and value-add component (beyond just the business, to highlight policy support and key community projects).

Strategically selected, these efforts can help Dow stand out as the strategic partner of choice to the governments, and to the in-country marketplace.

3. Investment Climate:
For the longer-term growth strategy, many key markets have yet to establish themselves as global economic players complete with high-quality, high-standard rule of law, investment climates.  The majority of African nations have significant problems with corruption, rule of law and bureaucratic red tape.  Saudi Arabia has only recently acceded to the WTO (and will now have a closely-monitored 5 year implementation period).  Libya has expressed interest in joining the WTO but has a number of years before that possibility.

Establishing a progressive investment climate not only supports Dow’s ability to grow in country (including appropriate chemicals management/regulatory practices; security for chemical shipments; intellectual property protection and enforcement) but also ensures strong executive/board management support by demonstrating efforts to improve on-the-ground investment framework.  Efforts include political and economic risk assessments, developing a network of key government advocates for Dow’s investments (including bilateral partners such as the US), and supporting capacity building efforts for community and government commitments.

Key Messages:
Dow has specific messages on key issues and agreements – but general trade messages are as follows:

• Dow supports the development of a global, rules-based trading system to foster economic growth and sustainable development around the world.
• Trade liberalization provides opportunities for all countries – developed and developing – to increase their standard of living, expand consumer choice and improve access to education and job opportunities.
• Dow believes that the current system of country-specific tariffs and duties is limiting the ability of companies to compete on equal terms around the world.  Countries benefit more from opening markets (i.e., Singapore model) rather than protectionism (i.e., Myanmar)