USTR signs trade agreement with China on ending aluminium export subsidies

The People’s Republic of China has agreed to end export subsidies that have helped to drown the aluminium market (among others) in an oversupply of the metal. United States Trade Representative Michael Froman made the announcement regarding an agreement ending the subsidies in question last week Wednesday.

“Today we have signed an agreement with China to eliminate export subsidies that the United States challenged because they are prohibited under WTO rules,” said U.S. Trade Representative Michael Froman. “This is a win for Americans employed in seven diverse sectors that run the gamut from agriculture to textiles to medical products, who will benefit from a more level playing field on which to compete. This agreement once again underscores that President Obama’s commitment to enforce our trade rights aggressively to secure real economic results for American workers, farmers, and businesses of all sizes and in every part of the country.”

Prior to the announcement, Aluminum Association President & CEO Heidi Brock addressed a panel of experts from the U.S. Trade Representative (USTR), the U.S. International Trade Commission (USITC), Department of Commerce (DOC) about how the persistent overproduction of aluminum in China has been hurting the global market and driving some U.S. aluminum producers to shut down production and lay off workers.

Brock had noted that, despite 36 percent topline domestic demand growth over the past 6 years and shipments approaching records last seen in the mid-2000s, the upstream segment of the domestic aluminum industry is severely challenged. Since the beginning of 2015, eight U.S.-based aluminum smelters have curtailed or closed representing more than 60 percent of U.S. primary aluminum capacity and impacting more than 3,000 workers.

“This is a tale of two industries,” said Brock. “Oversupply has depressed global markets to the point of making it impossible for many producers, including here in the United States, to operate and remain profitable.”

Following USTR's announcement, Aluminum Association said, the industry body is "pleased by the agreement between the U.S. and China that will result in the termination of export subsidies. This agreement illustrates that the WTO process can be used constructively to mediate disputes between member countries, for the benefit of the global trading community. We applaud the USTR and Ambassador Froman’s leadership on this issue which shows a commitment to create a fair and level playing field for global manufacturers."

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