US, EU, and Japan Aluminium Associations Laud Agreement To Strengthen WTO Rules Against Subsidized Capacity

US, EU, and Japan Aluminium Associations Laud Agreement To Strengthen WTO Rules Against Subsidized Capacity

The Aluminum Association, European Aluminium, and the Japan Aluminium Association released a joint statement yesterday hailing an agreement among their respective governments to cooperate on strengthening World Trade Organization rules on industrial subsidies.

Citing an agreement among trade ministers from the three jurisdictions that the WTO Agreement on Subsidies and Countervailing Measures should be amended to address “market and trade distorting subsidization existing in certain jurisdictions,” the three trade associations greeted the agreement as a major step forward.

“As association leaders who have long expressed grave concerns about unfairly subsidized aluminum overcapacity, we welcome this important step toward addressing some of the significant trade distortions that have resulted in the long-standing difficulties faced by aluminum producers. We also expect Trade Ministers to continue this important work in the separate group of 13 countries that gathered in Ottawa in October 2018 on additional WTO reforms.”

The three associations went on to cite an Organisation for Economic Cooperation and Development (OECD) study of a year ago pointing out the non-market forces that have encouraged otherwise non-profitable aluminium capacity and its negative impact on the aluminium value chain.

Per the OECD report, aluminium firms around the world have been the recipients of US$70 billion in artificial support from 2013 through 2017. The report found that the vast majority of such support was paid out to a quintet of aluminium companies based in the People’s Republic of China.

“The OECD evidence underscores the need for urgent action to level the global playing field for the aluminum sector,” the statement concluded. “We support the report’s suggested improvements to the design of the WTO trade rules on subsidies and the need to better account for the influence of state actors given the dual role of some State-Owned Enterprises (SOEs) as both recipients and providers of support.”