Upstream and Downstream

Rethinking European import and export duties on aluminum

By Mario Conserva

 

Duties can be a double-edged sword when it comes to successful trade regulation. If we consider Europe’s policy on aluminum, the key may involve reviewing recent changes in the economic and production landscape in order to design and implement effective strategies.

The recent European anti-dumping measures imposed on Chinese-made aluminum extrusions are both sizeable and significant in terms of defending the competitiveness of the European light metals downstream system. This is the heart of an industrial segment representing about 90% of Europe’s aluminum industry turnover and workforce, involved in rolling, extrusion, foundry and diecasting systems, castings, machining and finishing.

The European Commission’s initiative, fully supported by FACE, protects our manufacturing sector from long-standing unfair trade practices, through anti-dumping duties ranging from just over 30% to 48% on semi-finished products such as aluminum bars, tubes and profiles coming from China.

Of course these are not the only duties at issue. Now is the time to address the central question around another type of tariff, the one we’ve had on the import of raw metal in the EU for years. These duties were first imposed back when we were only talking about primary aluminum—at a time when it was still produced in large quantities in each individual European country and protected from extra-European imports with a duty of 6%. Today, it no longer makes good business sense to keep this protection in place because European production of primary aluminum has been on the decrease for years due to the unrestricted delocalization of smelters: over 70% of the internal primary aluminum requirement must now be covered by imports.

The extra cost of this type of duty, an illogical measure for a product that is clearly facing a production shortage in the EU, has been calculated at over 1 billion euros per year for the European industry that transforms and uses light metals. FACE has been calling for the elimination of this tariff for years, viewing it is a necessary first step. It’s a simple, quick, cost-free measure, which harms no one and eliminates improper subsidies. It is also in line with other post-Covid measures proposed by the European Commission, an important step forward that will give new impetus to the European and Italian aluminum industry.

 

Mario Conserva is the Secretary General of FACE, The Federation of Aluminum Consumers in Europe.

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