European Aluminium welcomes the agreement of G7 leaders to accelerate the discussions on reforming the World Trade Organization to better deal with trade challenges posed by China. As President Macron highlighted yesterday during the closing press conference with President Trump, Chinese excess capacity unbalances some world markets.
As the prominent OECD report “Measuring distortions in international markets: The aluminium value chain” highlighted, the global aluminium market is one of these markets.
The report indicates that global aluminium 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. Chinese state support has resulted in excess capacities and the ability for Chinese companies to export unfairly priced aluminium products, leading to significant distortions in international trade flows. In Europe, there is a sharp surge in Chinese exports which puts tremendous pressure on European aluminium producers.
“It is clear that the current WTO rules are inadequate and should be redesigned to address global market distortions resulting from subsidies. We also need to assess the impact of government support throughout the whole value chain, and to better account for the influence of state actors given the dual role of some State Owned Enterprises as both recipients and providers of support,” said Gerd Götz, Director General of European Aluminium.