Dow U.S. Trade Position- Background
Good trade and investment policies help to raise standards of living and increase consumer choice, provide market access and reduce the Company's operational costs. Trade liberalization supports the global chemical industry by opening up access to feedstocks, manufacturing environments and access to rapidly-growing consumer markets around the world.

Dow has been headquartered in Midland, Michigan for 110 years, with global operations for more than a half century. While 34% of Dow's sales occurred in the US (2007), Dow exported more than $14.2B worth of US-manufactured products – 75% of those exports were to Dow facilities and assets in other parts of the world. Trade and market access will allow Dow to export more goods to Dow facilities and customers while broadening its custumer base.

Positive impact from good trade policy can range from reduction of tariffs, improvement to country legal/investment structure which enables better market access, to reputational support through increased visibility for Dow's global contributions to developing countries.

Key Messages:
Dow advocates for U.S. trade policy that promotes:

•  Creating a "level playing field" – the US economy is one of the most open in the world – with limited and low tariffs or barriers to entry. Trade agreements ensure that same treatment with key foreign partners – reciprocal market access that enables free and fair American participation.

•  Reducing trade barriers – Trade barriers include tariffs and none tariff barriers such as regulatory discrimination, lack of intellectual property protection etc

•  Raising standards – promoting high quality, high standard practices of rule of law, intellectual property protection etc to give American investors fair treatment in foreign trade partner countries.

•  Increasing competitiveness- American companies are the most competitive in the world – when market access for export and investors is open and fair. Trade agreements create opportunities for American companies to lead in global economic growth.

•  Benefiting the U.S. economy and the American people – Trade can help sustain jobs by providing access to customers, feedstock and creating new opportunities fro services. Trade also gives US consumers access to high quality, competitively priced goods.

Our Position

Trade policy is critical for American manufacturers to access the 95% of the world's consumers living outside of the U.S. In 2009, Dow exported $6.3 billion worth of U.S.-manufactured goods to locations across the globe. Dow's exports are approximately 20% of our U.S.-based production, making one-fifth of Dow jobs in the U.S. dependent on our ability to export.

Overseas investments and exports support job growth in the U.S. For example, Dow has doubled our exports from the U.S. to China over the past three years. And the majority of those exports are Dow U.S. to Dow China – our investments drive job growth at home. Growing America's exports also supports small business, jobs and local economies; at Dow, we buy 15% of our inputs from small and medium sized enterprises.

For American manufacturers, trade policy covers a wide range of key policy issues central to creating a level playing field and helping American manufacturers to be more competitive. In addition to tariff reduction, trade also combats non-tariff barriers (NTBs), promotes an investment climate for global operations with high standards, and provides protection and enforcement of intellectual property rights (IPR). U.S. leadership in trade policy both promotes high standards among our trading partners and drives their commitments to fair and open markets.

Policy Recommendations

To help American manufacturers grow U.S. exports, create domestic jobs and better compete in today's global marketplace, Dow urges Congress to take action on the following priorities:

•  Pass the pending Free Trade Agreements (FTAs): Colombia, Korea and Panama. American leadership on trade is critical, and U.S.-driven trade agreements are of the highest standard in the world. By not passing the agreements that have been negotiated — and by not launching new negotiations with other key trading partners — the U.S. is falling behind.

•  Colombia FTA: Passage of this agreement would level the playing field by eliminating tariffs on over $220 million in Dow U.S.-manufactured products to Colombia, saving over $14 million in current tariffs and enabling Dow to reallocate those funds for innovation and investment.

•  KORUS FTA: Passage of KORUS will reduce tariffs by 50% on Dow's more than $270 million worth of products exported to South Korea. This agreement will create important opportunities for our business and for Dow's Korean customers, whose growth in new markets will help further grow our business as our customers source additional inputs.

•  Panama FTA: The Panama FTA represents important market access and business growth opportunities. For Dow's nearly $3 million in exports from the U.S. to Panama, this agreement would create an immediate reduction in tariffs, allowing us to better compete in the Central American emerging market.

•  Progress the Transpacific Partnership. These current negotiations with key markets such as Vietnam and Malaysia, and strong existing trading partners such as Singapore and Australia, will develop a gold standard core agreement in the Asia Pacific region. That agreement has the potential to rationalize current rules, harmonize regulatory practices and increase efficiencies in customs processing – all elements that will expand opportunities for Dow and other American manufacturers in the fast-developing markets of Asia.

•  Strengthen domestic trade initiatives. The U.S. must improve existing trade practices that support U.S. production – including updating the Miscellaneous Tariff Bill (MTB) process to eliminate unnecessary tariffs on raw materials and other manufacturing components not available domestically. Congress also needs to pass extensions of both the Generalized System of Preferences (GSP) and the Andean Trade Preferences Act (ATPA) to keep a competitive supply chain available for U.S. manufacturing.