NEWS OF THE WEEK

BULLISH NEW YEAR EXPECTED: Chemical makers welcome Clinton era

This year hasn't been too bad for U.S. chemical makers, with a re­newal of growth after a poor 1991.

Next year will be considerably better. And the chemical industry expects to benefit from economic plans and proposals of the incoming Clinton Administration.

These are the primary messages that emerge from the Chemical Manufac­turers Association's traditional year's end economic report and press brief­ing. Based in part on responses to a survey of CMA's corporate members, the report indicates chemical sales will grow a quite healthy 6% this year, with an even better 8% projected next year. Chemical sales showed no growth in 1991. Plant operating rates will move up from 81% this year to 83% next year, supporting an expected 13% gain in industry earnings in 1993.

Moreover, points out Allen J. Lenz, CMA's director of trade and economics, President-elect Clinton espouses policies such as investment tax credits that are supportive of manufacturing industries like the chemical industry. Clinton also sets the creation of good, high-paying jobs as a priority for his Administration. Chemical makers have long done that

Chemical output starts to grow again in 1992 Production index for chemicals, 1982 = 100 120 1

110

100

1982 83 84 85 86 87 88 89 90 91 92

with their high-tech, high-investment approach, Lenz observes.

He notes that chemical workers earn 30% more than the average salary for all manufacturing workers, and 70% more than the average for the whole private sector. The chemical industry maintained a steady work force of slightly more than 1 million during the past decade—a period in which the number of jobs in all manufacturing in­dustries plunged about 15%.

CMA also indicates that its members have not bought the "ozone man" cari­cature of the new Administration's views on environmental issues, a con­cept spread in Republican attacks during the recent campaign. According to CMA staff members, Clinton's environmental transition team consists of knowledge­able, high-caliber individuals who have given early signs that they take a prag­matic and flexible approach.

For example, CMA officials say, the new team seems to realize that the so-called command-and-control approach to pollution control of the past 20 years has gone about as far as it usefully can: What is needed is more emphasis on goal-oriented incentives that leave companies room to maneuver.

CMA's economic report also paints an optimistic picture. Chemical production— which grew only about 1% in both 1990 and 1991—will rise about 5% in 1992. Earnings also should be up this year, re­versing a substantial dip last year.

U.S. chemicals remain highly compet­itive on world markets. The report shows that the chemical industry re­mains the U.S/s largest exporter, with exports rising about 4% in 1992, to al­most $45 billion, and up a projected 5% in 1993. The chemical industry's trade surplus will be about $17.3 billion this year. This will be less than the record $18.8 billion surplus in 1991, but will still be the second highest positive balance for any U.S. industry in 1992, trailing only aircraft manufacturing.

Chemical makers continue to invest

heavily in their futures, the CMA survey also shows. Industrywide investment for new plant and equipment will be up about 8% this year, to just over $23 bil­lion, and up an expected 16% more next year. Chemical R&D spending also is still on the rise—up an estimated 4% in 1992, to about $14 billion, and up a pro­jected 5% next year.

Michael Heylin

UN endorses global chemical arms treaty The United Nations General Assembly last week approved by consensus a resr olution endorsing a landmark global chemical weapons treaty, banning an en­tire class of weapons of mass destruc­tion. The resolution, supported by 145 nations, paves the way for a ceremony, slated for Jan. 13 in Paris, that opens the treaty for signing by the world's nations.

To become international law, the trea­ty must be ratified by at least 65 coun­tries. This goal is expected to be reached by 1995. In the interim, a new organiza­tion will be set up in The Hague that will devise plans and programs to monitor and verify compliance with the treaty. A preparatory commission to define and structure this organization will hold its first meeting in The Hague in February. Countries that sign the treaty in Paris will send delegates to the meeting.

Hammered out during 24 years of marathon negotiating sessions in ths Geneva-based Conference on Disarma­ment, the treaty is called an "unprece^ dented global, comprehensive, and veri­fiable multilateral disarmament agree­ment" by Polish delegate Jerzy Zaleski, who played a key role at the UN meet­ing. U.S. delegate Alexander Watson calls the resolution, adopted without a vote, history making. He notes the U.S/s belief that the key to the treaty's viability is "universal participation."

Convincing nearly every nation of the

4 DECEMBER 7,1992 C&EN