U.S. Aluminum Trade Group Lobbies U.K. in Fighting Chinese Subsidies: China Trade Taskforce calls on prime minister to press WTO for action
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LONDON—U.S. aluminum industry figures urged their European colleagues to join them in acting against what they called China’s illegal subsidizing of its aluminum industry, after publishing an open letter to U.K. Prime Minister Theresa May on the matter on Wednesday.
The China Trade Taskforce, a campaigning body made up of industry figures and trade lawyers, claims that China had unfairly subsidized its heavy industries and breached World Trade Organization rules in doing so.
Representing the aluminum industry, the group called on Prime Minister Theresa May to “actively engage with the WTO on this matter and press for action.”
The prime minister’s office had no immediate comment.
The action comes after the Trump administration announced recently it would open an investigation to ascertain the extent to which cheap Chinese aluminum imports “impair the national security.”
While the Obama administration in December launched a formal complaint with the WTO about Chinese aluminum subsidies, last week’s announcement by the U.S. marks a shift of focus to aluminum, after European nations and the U.S. last year enacted measures to protect their steel industries from Chinese dumping.
When China joined the WTO in 2001, its domestic aluminum demand justified its industry’s growth rate, according to the CEO of Century Aluminum, Michael Bless. However, with the forecast for China’s aluminum demand growth at 5% to 6% this year but its supply seen expanding 11% to 12%, the Chinese industry “has no other advantage than state support,” he said Wednesday.
While China now accounts for 56% of global production, the European Union’s share of the global market has fallen to 7%. “If nothing changes, the European aluminum market will soon cease to exist,” the task force said.
The campaign’s open letter to the prime minister comes as the world’s largest aluminum producer, China Hongqiao Group Ltd., faces fraud allegations for underreporting production costs and failing to disclose electricity expenses.
Communist China is dumping aluminum into the U.S. and threatening the jobs of thousands of Americans. In the past 18 months alone, 3,500 aluminum workers have lost their jobs.
Join our press conference in the Shangri La Hotel, The Shard, London at 08:00 am for a 08:15am start on Wednesday 3rd May 2017.
China’s Illegal Aluminum Subsidies and the WTO. The Shangri La, The Shard, London, SE1 9SG 08:00 for an 08:15 start Wednesday 3rd May 2017. Guest Speakers: Lord Digby Jones, Mike Bless, CEO of Century Aluminium
The China Trade Task Force (CTTF), the organization campaigning to stop China’s illegal aluminum subsidies that have resulted in the loss of thousands of jobs across the EU, the US and UK, are holding a press conference in the Shangri La Hotel, The Shard, London at 08:00 am for a 08:15am start on Wednesday 3rd May 2017. The press conference will update on progress made by the campaign in their fight to pressure the U.S. government, the European Union and the WTO (World Trade Organization) to help save thousands of European and American aluminium jobs.
A light breakfast will be provided. The event will finish by 09:15am
A recent Economic Policy Institute report notes that the United States bears a uniquely large burden, suffering more than other countries from subsidized and dumped imports…
The historic first meeting between President Trump and Chinese President Xi Jinping is underway at Mar-a-Lago. While the news media will focus on U.S. – China issues such as North Korea and the South China Sea, most Americans have a singular concern—China’s unfair trade practices and how China’s cheating threats their job security. When President Trump sits down with the Chinese President, one would hope that he keeps the plight of the American worker close at mind.
Ironically, in the early 2000s when China joined the WTO, aluminum experts expected China to be a net importer. But, China has abused the rules. Fast forward to 2016, China produced more than half of the world’s aluminum without any natural comparative advantage other than unprecedented government support, causing a massive amount of excess production capacity to overhang the aluminum market. This has depressed prices by more than 45 percent, making it incredibly challenging for competitors to keep up.
The consequences in the U.S. are far and wide. A recent Economic Policy Institute report notes that the United States bears a uniquely large burden, suffering more than other countries from subsidized and dumped imports in these industries……
Since the early 2000s, the decline has been precipitous, as U.S. producers faced plummeting world commodity prices in the wake of a major recession and a flood of cheap aluminum from China, which the U.S. government alleges has engaged in unfair trade practices in order to gain market share from U.S. competitors.
For nearly a century, the aluminum industry provided some of the best-paid manufacturing jobs in rural America.
The industry boomed from the early 1900s through the post-WWII years, as the new lightweight metal was used for ships and airplanes, home appliances and food packaging. Sprawling smelting and rolling operations, which use a massive amount of electricity, were built along major U.S. rivers with hydroelectric resources, such as the Columbia and St. Lawrence.
Many of the hard manual-labor jobs at aluminum smelters required no more than a high school education. The work was steady as long as the U.S. economy was growing. And the jobs, many of them with union representation, paid wages that could support a family, along with health and pension benefits for a secure retirement.
But the industry’s footprint in the U.S. has been shrinking for several decades. There are fewer factories and fewer jobs. Since the early 2000s, the decline has been precipitous, as U.S. producers faced plummeting world commodity prices in the wake of a major recession and a flood of cheap aluminum from China, which the U.S. government alleges has engaged in unfair trade practices in order to gain market share from U.S. competitors.
Aluminum production has slowed down in the last few decades. – Sarah Menendez/Marketplace
In November 2015, Alcoa, the oldest and biggest American aluminum producer, announced it was curtailing domestic production in the face of poor global market conditions and said it would close several of its remaining primary smelters in the U.S., including those in Massena, New York and Wenatchee, Washington. In all, more than 1,000 aluminum workers nationwide were to be laid off.
The news hit the affected communities hard. Bob Smith, president of Steelworkers Local 420 in Massena, had just made the first mortgage payment on a house he’d built for his young family. That day, he was installing a furnace and said he found himself “in the crawlspace, looking down and just seeing the tears hitting the ground. So that’s what we went through.”
Mark Goodfellow, Bob Smith and David LaClair Jr., leaders of Steelworkers Local 420 in Massena. The Steelworkers organized with other unions. – Mitchell Hartman/Marketplace
The Steelworkers organized with other local unions. Local officials and businesspeople pressured state elected leaders. And three weeks after the original closure announcement, Alcoa and Gov. Andrew Cuomo announced a deal to keep the Massena smelter open and maintain 600 jobs at the facility through March 2019. Alcoa would receive financial incentives from the state economic development agency and the state power authority totaling $73 million, subject to specific performance targets, and also subject to significant financial penalties if it did not meet them.
But even with these 600 jobs saved, and protected for several more years, Massena has seen an exodus of jobs, companies and families in recent decades. Alcoa’s operations have been downsized and General Motors’ car plant closed in 2008.
Unemployment in St. Lawrence County is 6.1 percent as of December, among the worst in the state. Main Street in downtown has a lot of boarded-up storefronts.
“You can’t drive a street in this town without seeing a house or two is for sale, if not run down,” said union aluminum worker David LaClair. “The drugs have moved in.”
Erin Covell, a guidance counselor at Massena Central High, represents the American Federation of Teachers in town. She helped organize a “People Over Profits” rally to pressure Alcoa. She’s seen the result of deindustrialization in her school as well-paid jobs for high school graduates disappeared.
Guidance counselor Erin Covell at Massena Central High has seen well-paying jobs for high school graduates disappear. – Mitchell Hartman/Marketplace
“We have started helping students with food and clothing and shelter, not just the student, but their entire family,” Covell said.
There are now economic development plans going forward on Massena’s riverfront, which Karen Saint Hilaire, a former county administrator and business professor at the State University of New York, said is a good start for reviving the local economy.
But she’s skeptical about the $73 million in state financial incentives and power-cost assistance that Alcoa received to keep the jobs and smelter in Massena.
“It’s outrageous, and it makes no economic sense. It’s more money than any of those people working out there make,” St. Hilaire said. “However, I’m totally glad that it happened because it at least buys us three years to do something else.”
St. Hilaire has convened a Facebook group to promote innovation in local agriculture, education and small business investment.
On a Friday night at the local hockey arena, a packed crowd showed strong civic spirit, cheering on the local high school boys team, the Red Raiders. Jim Hidy had come out to watch the game. He’s a former mayor of Massena and a retired General Motors worker.
“Hockey’s tremendous up here, just keeps the community together,” he said.
The Massena Red Raiders play McQuaid Jesuit at the town hockey arena in Massena, New York. – Mitchell Hartman/Marketplace
Hidy supported Donald Trump in the 2016 election.
“I felt we needed a businessman running the business. When you get the industries back here, when you get fair trade agreements, middle-class America will benefit.”
Alcoa has not committed to keeping the Massena smelter open after its financial deal with New York State expires in 2019.
Mike Bless, Century Aluminum’s chief executive officer, discusses the Trump administration’s investigation of aluminum imports.
Mike Bless, Century Aluminum’s chief executive officer, discusses the Trump administration’s investigation of aluminum imports. He speaks with Bloomberg’s Julie Hyman and Scarlet Fu on “Bloomberg Markets.” (Source: Bloomberg)
