State-financed Chinese dumping undermines Europe’s trade defence and seriously harms its ability to protect jobs, innovative businesses, and entire industrial value chains.
For this reason, we applaud the Commission for imposing definitive anti-dumping rules on Chinese aluminium extrusions and proposing to regulate the import of products with foreign subsidies.
However, we strongly oppose the 9-month suspension of the regulation for Chinese anti-dumping duties on aluminium flat-rolled products. Until dumped imports get regulated, our region will be flooded with underpriced, high-carbon aluminium that jeopardises our Green Deal ambitions.
A 2021 OECD report examined state subsidies to 32 companies representing 70% of the global aluminum market. The study found that Chinese firms received state support ranging from 4% to 7% of annual revenues compared to similar support representing 0.2% of annual revenues of non-Chinese firms. These subsidies unfairly benefit Chinese production at the expense of production in Europe. They also weaken domestic supply chains for many products vital to Europe’s strategic autonomy.
The harmful effects of distortive subsidies must be tackled on a European and global level. European Aluminium welcomes the EU Commission’s initiative to propose a new instrument on foreign subsidies and calls upon the European Commission to effectively address the distortive effects of foreign subsidies in the EU single market and help create a level playing field for the aluminium industry in Europe.
Together with our American, Canadian, and Japanese counterparts, we are also advocating for a global solution to this problem and have released a joint policy brief for G7 leaders.
On 1 January 2022, the United States replaced its Section 232 tariffs on aluminum with tariff-rate quotas. Under the tariff-rate quota system, import volumes are allocated on an EU Member State basis in line with the 2018-19 historical trade volumes. Section 232 aluminium products from the EU that are within the quota will enter free of any Section 232 duty, while products entering above the quota will continue to be subject to a 10 percent duty.
We strongly oppose the tariff-rate quota system. European Aluminium and its US counterpart The Aluminum Association have called for lifting the unjustified Section 232 tariffs on EU imports since their implementation in 2018 and have submitted a concrete proposal on restoring the trading relationship between the two markets. Europe has always been an important ally of the US, and European aluminium exports to the US have never posed a threat to US national security. On the contrary, the US and European aluminium value chains are strongly interlinked, with over 15 multinationals operating in both territories.
European Aluminium welcomes the EU-US decision to develop a Global Arrangement on Sustainable Steel and Aluminium. We believe the GASA if designed correctly, can be an excellent platform for deeper cooperation between Europe, the US and other like-minded regions towards reducing global emissions and non-market behaviours by establishing a common approach based on coherence and a level playing field. The GASA can also play an important role in driving decarbonisation efforts while ensuring the competitiveness of industry players.
According to the announcement statement from 31 October, the EU and US seek to conclude their negotiations on the Arrangement by 31 October 2023. We consider the permanent removal of the Section 232 tariffs and quota system for European companies to be pivotal for starting negotiations on the implementation of such an Arrangement.
The existing World Trade Organisation (WTO) rules are inadequate to remedy the scale and scope of state intervention in the global aluminium market. Most WTO rules date back to 1995, when the organisation was established, and before China was the dominant player it is now. The rules should be redesigned to address global market distortions resulting from subsidies. The WTO should also provide tools to assess the impact of government support throughout the whole value chain and better account for the influence of state actors, given the dual role of some State-Owned Enterprises as both recipients and providers of support.
Trade is not just about business. European Union trade policy has had a significant impact on other policies such as climate change, social rights, safety, and standards. This policy linkage is critical for our industry to lead on sustainability and promote environmental, health, and safety (EHS) standards globally. For this reason, we welcome new free trade agreements with trade partners that comply with the Paris Agreement, high labour standards, and equal standards in terms of consumer/employee health and safety.
Levelling the playing field for European producers
European Aluminium is fully in favour of free trade as long as it is fair. Unfair trade practices are a real threat to our existence. Over the past decades, China has been increasingly distorting our market with subsidised and underpriced products, leading to European production losses and broader trade challenges globally. Moreover, the influx of Chinese imports jeopardises our sustainability objectives, as primary aluminium produced in China has a carbon footprint that is almost three times higher than European primary aluminium (6.8 kg of CO2 per kg of aluminium produced versus a Chinese average of 20 kg of CO2)
To compete in a fair market that helps the industry advance for the better, we need EU policymakers to understand our urgency. Europe needs effective trade defence instruments, a robust screening mechanism, and free trade agreements that consider climate change policies conditional.