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IFTA supports USTR decision to hold China accountable for illegal subsidies on aluminum

In January 2017 the U.S. Trade Representative (USTR) formally requested consultations with China through the World Trade Organization (WTO) concerning China’s illegal aluminum subsidies. The Wauconda, Ill.-based International Fair Trade Alliance (IFTA) commends and congratulates the USTR on this decision.

Aluminum extruders from around the world have fallen prey to the Chinese aluminum extrusion industry’s predatory pricing schemes, largely financed through the Government of China’s (GOC) unfair and illegal subsidies, says IFTA. Several countries have already imposed measures to remedy the negative effects unfairly traded Chinese aluminum extrusions have had on their domestic aluminum extrusion industries. However, extruders in many other countries have not been able to stand against the onslaught of unfairly traded Chinese extrusions. Consequently, extruders in these countries are seeing their industry disappear.

IFTA believes that the primary engine that drives these predatory practices is the directed lending by the GOC at non-market-based rates to Chinese primary aluminum producers that causes capacity and production to expand well beyond global demand. Furthermore, to off-take this massive supply of excess aluminum, the GOC has put in place incentives to convert primary aluminum into extrusions, which then are dumped on the world market at prices well below market. IFTA notes that billions of pounds of aluminum extrusions have been transported to the U.S., Mexico, Malaysia, and Vietnam.

IFTA and its members have publicly asked the GOC and the Chinese aluminum industry to eliminate these unfair and illegal practices. However, to date the GOC has made no attempt to eliminate these practices and address its root excess capacity problems, and instead has chosen to export those problems to the rest of the world.

IFTA members are hopeful that the USTR’s decision will be a productive first step in eliminating these policies.