USW Supports Announcement of USTR Action to Address Chinese Aluminum Overcapacity: China's Free Ride Needs to End

PITTSBURGH, Jan. 12, 2017 /PRNewswire-USNewswire/ -- The United Steelworkers (USW) released the following statement today in support of the United States Trade Representative's (USTR) announcement that it was requesting consultations with China regarding its continuing expansion of production in the aluminum sector. This ongoing expansion and overcapacity has resulted in injury to U.S. production and employment. The filing is the result of a cooperative effort initiated more than one year ago by the USW and Century Aluminum with the USTR to address global overcapacity in the aluminum sector.

"USTR's request for consultations is intended to eliminate the devastating effects China's actions to dominate world aluminum production have created for its competitors," said USW International President Leo W. Gerard. "This is called 'serious prejudice' in trade law terminology.

"Fueled by supporting policies, China's massive expansion of industrial capacity in aluminum has increased its capacity by 22 million tons (or 130 percent) in the last eight years, helping to depress world prices of aluminum by more than 35 percent.

"As a result, U.S. producers cannot get fair market prices for their products.  This has led to significant injury with numerous facilities closing and more than 6,600 highly skilled USW members laid off.

"Success in this case would give hope to the thousands of aluminum sector workers across the country that have either lost their jobs or are in fear of losing them in this distorted market. We worked with allies in Congress and partners in the American aluminum industry to bring the severity of the problem to USTR's attention and especially want to thank Senators Wyden, Schumer, Brown and Portman for their leadership. The staff of the USTR has put considerable time and effort into this case, as they have with many other important enforcement actions.

"As a result, USTR has studied the causes of China's massive, ongoing capacity expansion that has decimated production and our members' jobs. In 2008, there were 14 smelters operating in America. Today there are five. The loss of this production and the thousands of jobs it took with it can be directly tied to the predatory practices of Chinese state-directed entities.

"When China and other countries ignore rules in other sectors, the USW works hard to get relief through trade cases, and these have momentarily helped to stem the flood of steel imports and to slow imports of aluminum extrusion products. 

"If the USW had been able to bring a traditional trade case against China, we would have done so years ago but unfortunately traditional trade cases are not effective for basic aluminum. China's massive, illegal subsidies have depressed world prices and made American domestic operations unprofitable, regardless of export levels. Only global action will be effective."

USW International Vice President Tom Conway said: "Some 60 percent of primary U.S. aluminum capacity has gone offline in the last nine months. U.S. domestic aluminum producers, workers and communities suffer as China continues to break its promises and undermine American jobs. This case deserves the attention and support of our trading partners and those who argue for further trade liberalization. China is not a market economy, and its actions in this sector and others are constant testimony to that fact.

"Every job counts. We have the most productive, efficient workers in the world. We can compete against anyone that plays by the rules, but we can't compete against governments. Chinese companies act primarily on behalf of and with the support of the state. That's not market economics."

President Gerard said, "China's free ride needs to end. Fifteen years ago, China became a member of the WTO and since then, it has enjoyed virtually unfettered access to the U.S. market. In return they limit our exports and undermine our economic interests. This case is part of a broader enforcement effort which we hope will increase with the next administration.

"We call on other aluminum-producing nations -- and, in fact, all nations concerned about China's overcapacity in this and many other sectors -- to join the U.S. government in this case. The WTO needs to act expeditiously and recognize that success in this case, as in other contexts that deal with China's failure to become a market economy, is vital to continuing support for itself as an institution. China's failure to become a market economy even after being a WTO member for more than 15 years is creating serious stresses in the international trading system, not to mention severe dislocations in many economies, developed and developing alike, for workers and businesses that operate based on the harsh discipline of the free market. If the WTO fails to sanction China's harmful economic approach, it will signal a need for America to reclaim control of its trade agenda. Too often, the WTO has acted against the interest of those seeking to enforce the rules of fair trade. This case provides an opportunity for the WTO to restore some of its legitimacy."

The USW represents 850,000 workers in North America employed in many industries, including metals, rubber, chemicals, paper, oil refining, mining and the service and public sectors.  For more information: http://www.usw.org/.

CONTACT:  Holly Hart (202) 778-4384
[email protected]

SOURCE United Steelworkers (USW)

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