Free Trade Or Fair Trade | January 7, 2008 Issue - Vol. 86 Issue 1 | Chemical & Engineering News
Volume 86 Issue 1 | p. 16 | Insights
Issue Date: January 7, 2008

Free Trade Or Fair Trade

The chemical industry would benefit from international standards of environmental and safety compliance
Department: Business, Government & Policy
A chemical plant along the banks of the Huai River in Bengbu.
Credit: Jean-François Tremblay, C&EN Hong Kong
A chemical plant along the banks of the Huai River in Bengbu.
Credit: Jean-François Tremblay, C&EN Hong Kong

A friend who buys pharmaceutical intermediates in China told me about his visit to a plant in the eastern province of Zhejiang and how he saw a Chinese worker bleeding from the foot being evacuated by piggy-backing on a colleague. The two froze when they noticed him watching them. But they resumed their course, because they had to. The plant, my friend said, was dirty, dangerous, and poorly operated. Injuries in such a place were probably frequent, he told me.

For the past three years, I have been traveling in China once or twice a month. On every trip, I expect to be surprised by something. Someone will be far more exceptional than I foresaw, or much more ordinary. The manufacturing site of some obscure company will feature state-of-the-art facilities, or terribly old and hazardous-looking ones. As for going to a particular Chinese city for the first time, I never know what to expect.

Last October, I went to Bengbu, the second largest city in the generally poor province of Anhui. I was researching a story about "cancer villages"—places in China where the rates of cancers among local residents are extremely high. The rivers and streams flowing in and around Bengbu did appear to be highly polluted, and the air quality was also extremely bad. While I was there, a mild cold I had turned into bronchitis, and I personally blame the city's air for that.

Bengbu could certainly be described as an industrial city. There are several industrial parks. The city is home to a PetroChina subsidiary, Fubo, and to a major chemical works, Haixin Chemical. Along the banks of the Huai River, which runs though Bengbu, one sees several chemical complexes.

At the heart of this grime, urban Bengbu provides evidence of growing wealth. The city built a large museum a few years ago. Drawn by the city's emerging affluence, the international retail chain Carrefour just opened a supermarket there. A five-star hotel that opened a few years ago enjoys steady business, partly as a popular place for holding wedding receptions.

Bengbu's increasing affluence is, I believe, largely the result of a lack of environmental control by the city's manufacturers. The Huai River is one of China's dirtiest. On the eastern outskirts of Bengbu, cancer rates have risen to alarming levels.

Bengbu is only one of many places in China where companies can pollute nearly as much as they want if they provide jobs and pay taxes. Whereas chemical companies in Europe and the U.S. control their environmental emissions at great expense, companies in China, depending on where they are located, often do not have to care much about such matters. While this may seem an extraordinary claim, it also appears in a report on China's environmental performance put out last year by the Organization for Economic Cooperation & Development, one of the world's best-regarded sources of economic and social data.

Taking environmental shortcuts is certainly not enough to make China's entire chemical industry competitive. According to customs statistics, China as a whole has an annual trade deficit in chemicals of about $20 billion. But the country's exports are increasing faster than its imports. And the types of chemicals that China successfully exports are generally the ones that have caused the most pollution in Western countries: dyes, pigments, raw materials for pharmaceuticals and agrochemicals, food additives, and so on.

Fair trade is a slogan that protectionists often use to block free trade, and I have never liked it. But, really, how can it not be unfair for chemical companies in North America and Western Europe to have to compete against firms in China and other places that do not have to spend as much to ensure clean and safe production?

The World Trade Organization charter has little to say about leveling the international playing field in environmental and labor standards. WTO merely recognizes that the inequities in these areas are probably a source of unfair competition.

Industry groups like the American Chemistry Council or the Synthetic Organic Chemical Manufacturers Association (SOCMA) also have surprisingly little to say about leveling the international playing field in the production of chemicals. SOCMA spokesman Gregory Minchak tells C&EN that U.S. environmental policy is not the only issue weighing down the country's chemical industry. Other handicaps include high legal fees in the U.S. and U.S. energy policy. SOCMA, he adds, has lobbied for the U.S. Food & Drug Administration to inspect plants abroad more frequently to protect U.S. consumers and producers.

It is in no one's interest when chemicals exported to the U.S. and Europe are produced by companies that are free to maim their workers and pollute as much as they want. Manufacturers in China and elsewhere should certify that they abide by environmental and labor standards similar to those in the countries that they export to. These claims should be independently audited, as is increasingly the case in developed countries.

Views expressed on this page are those of the author and not necessarily those of ACS.

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