Trade is a fundamental source of growth and innovation for the global economy. It is also a force to promote our principles and policies in Europe. With a view to supporting the development of a sustainable and competitive aluminium industry in our continent, we are fully committed to endorse free and fair trade regimes respectful of WTO rules and to advocate for a level playing field among operators in the sector worldwide.
Our priorities: free and fair trade
The global aluminium market is currently experiencing major challenges. China is increasingly distorting the market with subsidised, cheap products and the US’ unilateral policies are further complicating global trade. Brexit, challenges to the implementation of WTO rules, and a wave of new free trade agreements between major economies are also impacting free and fair trade for European aluminium producers. It is essential to improve trade rules and level the playing field in order to restore normal market conditions so that all producers can compete fairly and transparently.
Chinese excess capacity is the root cause of market distortions in the aluminium industry. China has been building up excess capacity of aluminium for years and this, combined with China’s lower internal demand for aluminium, has flooded the world market with cheap, carbon intensive aluminium. Steps should be taken to prevent China’s flooding of the EU market with cheap aluminium.
- Through appropriate trade policies, the EU must ensure free and fair trade and a level playing field for the European aluminium industry.
- The EU should adopt an appropriate trade policy, including effectively implemented trade defence instruments as well as a robust investment screening mechanism.
- In Brexit negotiations, frictionless trade and strict rules of origins must be guaranteed.
- The current WTO rules are inadequate to deal with today’s trade realities and need to be updated.
Watch the below video to learn more about our key trade policy asks.
Anti-dumping and anti-subsidy
Europe’s aluminium industry is innovative, a leading employer and a major contributor to Europe’s COP21 ambitions. However, it faces threats from unfair competition. State-financed dumping undermines Europe’s trade defence and seriously harms its ability to protect jobs, innovative business, and entire industrial value chains.
The prominent OECD report “Measuring distortions in international markets: The aluminium value chain,” highlights how non-market forces were responsible for some of the recent increases in aluminium smelting capacities, with impacts throughout the value chain. The report estimates the state support received by 17 international companies using publicly available information. While most government support was provided in the primary aluminium segment, the OECD demonstrated that the support also provided meaningful benefits and advantages to production further down the value chain. In total, these companies have received up to USD 70 billion in different forms of support over the 2013-2017 period. Notably, 85% percent of the documented subsidies went to just five Chinese firms.
European Aluminium is fully in favour of free trade, however, it must be fair. Effective trade defence instruments – including solid and predictable anti-dumping and anti-subsidy legislation – are essential to ensure free and fair trade.
European Aluminium welcomes the initiative of the EU Commission to propose new instruments on as regards 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.
The White Paper on an Instrument on Foreign Subsidies proposed by the EU Commission in July 2020 provides additional instruments, but its ambitions must be urgently translated into effective measures.
To highlight the hazard that unfair dumping from countries like China poses to the European economy, European Aluminium has joined AEGIS Europe. AEGIS is an alliance of manufacturers from more than 30 sectors, including steel, ceramics, solar panels, car parts, train builders, textiles, bicycles, and many others.
Trade: more than business
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, among others. This policy linkage is critical for our industry to lead on sustainability and promote environmental, health and safety (EHS) standards globally. For this reason, our members welcome the need of a strong European trade policy that:
- Supports the fight to protect our environment and reverse global warming;
- Ensures the highest standards of health, safety for the products we trade and;
- Improves working conditions for workers at the international level.