GPCA Warns India against Harm of Protectionist Measures on MEG Imports from the GCC

GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)
GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)
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GPCA Warns India against Harm of Protectionist Measures on MEG Imports from the GCC

GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)
GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)

India’s recent adoption of trade protectionist measures on mono ethylene glycol (MEG) imports from Kuwait and Saudi Arabia is damaging to its domestic market, the Gulf Petrochemicals and Chemicals Association (GPCA) has warned.

The comments come after India’s Directorate General of Trade Remedies (DGTR) initiated a new anti-dumping investigation into MEG imports from Kuwait, Saudi Arabia, and the United States on June 28, 2021. The investigation – described by GPCA as “unjustified” and in breach of the rules laid by the World Trade Organization – was prompted by an application from two of India’s heavyweight chemical manufacturers.

The news alarmingly comes only a few months after India terminated another anti-dumping investigation concerning imports of MEG originating in or exported from Saudi Arabia (on April 6, 2020), Kuwait, Oman, Singapore, and the United Arab Emirates (on November 20, 2020), after the application filed by one of the two companies was withdrawn following extensive diplomatic and political engagement.

GPCA has called for the immediate termination of the investigation in line with India’s obligations under the WTO Agreements, of which the country is a member.

The association further noted that since the establishment of the WTO in 1995, India has initiated 23 anti-dumping investigations and imposed seven anti-dumping measures against Saudi Arabia and Kuwait. This figure is more than four times the number of investigations initiated, and measures imposed by any other WTO member.

According to a report by India’s Ministry of Chemicals and Fertilizers, India is net short of MEG with current demand of around 2.5 million metric tons (MT).

As this shortfall is expected to continue, GPCA warned India will need to import more MEG to satisfy domestic demand and ensure that prices are sustainable.

The continuous pursual of trade protectionist measures against countries in the Gulf Cooperation Council (GCC), which represent India’s largest chemicals import partner, could not only prove damaging to its domestic market, but also jeopardize exports, thereby creating a bottleneck.

“The new anti-dumping application is utterly unjustified as it is not based on valid legal and factual grounds. It also lacks evidence of MEG imports being dumped from Saudi Arabia and Kuwait,” said GPCA Secretary General Abdulwahab Al-Sadoun.

“The price at which MEG feedstock is imported from the two GCC states is based on market considerations and is in fact not different for MEG that is sold domestically or exported,” he added.

“Furthermore, there was no spike in MEG export volume from the two countries to India during the period of investigation (January 1, 2020 –December 31, 2020). Rather, there was a decline in comparison to the previous year.”

“To state that India’s MEG industry is suffering a material injury would be simply untrue. I can certify with confidence that from the research that GPCA has conducted and the facts on the ground, MEG imports from Kuwait and Saudi Arabia cannot have negatively impacted India’s domestic industry’s performance.”



Asian Stocks Gain after China Teases US Tariff Talks

Asian markets largely rose Friday, tracking Wall Street gains and as China said it was considering a US offer to negotiate steep tariffs. JADE GAO / AFP/File
Asian markets largely rose Friday, tracking Wall Street gains and as China said it was considering a US offer to negotiate steep tariffs. JADE GAO / AFP/File
TT
20

Asian Stocks Gain after China Teases US Tariff Talks

Asian markets largely rose Friday, tracking Wall Street gains and as China said it was considering a US offer to negotiate steep tariffs. JADE GAO / AFP/File
Asian markets largely rose Friday, tracking Wall Street gains and as China said it was considering a US offer to negotiate steep tariffs. JADE GAO / AFP/File

Asian markets largely rose Friday, tracking Wall Street gains, as China said it was considering a US offer to negotiate steep tariffs.

US markets forged higher Thursday following strong results from tech giants Microsoft and Meta that helped offset lingering economic worries.

Apple reported first-quarter profit above expectations but warned that US tariffs could cost the company and were disrupting its supply chain.

And Amazon reported a nine percent rise in first-quarter revenue, but its outlook fell as potential impact from the US-China trade war rattled investors.

Washington's punishing levies reached 145 percent on many Chinese products in April, while Beijing has responded with fresh 125 percent duties on imports from the United States.

On Friday, China's commerce ministry said it was evaluating a US offer for negotiations on tariffs, but wanted Washington to show "sincerity" and be ready to scrap levies that have roiled global markets and supply chains.

US President Donald Trump has repeatedly claimed that China has reached out for talks on the tariffs, and this week said he believed there was a "very good chance we're going to make a deal".

Dozens of countries face a 90-day deadline expiring in July to strike an agreement with Washington and avoid higher, country-specific rates.

Stephen Innes of SPI Asset Management said Beijing and Washington were now "waving detente flags" in their spiraling trade war.

Beijing's demand for sincerity was an apparent call to ditch the 145 percent rate, before holding serious talks, Innes said in a note Friday.

"But dig a layer deeper, and the path is still littered with landmines," he added.

In Asia trading Friday, Hong Kong's Hang Seng Index was up more than one percent in the morning, while Japan's main Nikkei index gained about 0.6 percent.

Japan's envoy for US tariff talks said in Washington on Thursday that a second round of negotiations between the two countries had been "frank and constructive".

Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.

The Bank of Japan warned earlier that tariffs were fueling global economic uncertainty and revised down its growth forecasts while keeping its key interest rate steady.

Traders are looking ahead Friday to US jobs data for April for indications of the US central bank's path for interest rates.