AEGIS Europe seeking govt support to save European aluminium from China’s overcapacity

AEGIS Europe, a consortium of about 30 European manufacturing associations said at a recent meet that it is looking ahead to receiving enhanced support from the European leaders in guarding domestic industries and workers against Chinese dumping onslaughts. This follows the discussions held at the EU-China Summit in Beijing on 12 – 13 July.

"The European Commission must not fail in its duty of care to European industry. There are many, many other EU industries at risk of disappearing, aside from steel, if the EU grants China MES. China does not meet the EU criteria for a market economy, and therefore it is entirely inappropriate to even consider this question until they do. Furthermore, there is no legal obligation to do so," stressed Milan Nitzschke, spokesman for AEGIS Europe.

"To state it simply, China's state planned economy systematically orchestrates overcapacities and then offers products below production costs in international markets to overwhelm competition and ultimately hold a monopolistic position, detrimental to the overall value chain," points out Nitzschke.

One of industries that stand to be affected the most is aluminium. China’s share in world aluminium has increased exponentially over the last one decade. Currently, China accounts for more 50 per cent of the world’s total aluminium production. Over the same period, about one third of aluminium smelters in Europe have shut down. China's aluminium overcapacity alone is now almost five times greater than total EU primary aluminium production.

"But, it is not only in steel and aluminium where Chinese overcapacity is a major problem. The impact of Chinese overcapacities is being felt in nearly every sector of European manufacturing from A, like Aluminium to Z, like Zero-Emission Technologies," points out Nitzschke.

Similar overcapacity related issues are plaguing other SME sectors as well.

"The EU must not appear weak in China. State-subsidised overcapacity and dumping are destroying fair competition and millions of jobs in Europe," said Nitzschke.

"The EU must reject China's demand for permission to dump goods into the EU. With MES granted in the EU, China would be able to expand dumping into the EU without limit. Only those countries that meet the European Union criteria for a market economy should be granted MES. The criteria are clear and have been in place since before the WTO Accession Protocol of China took effect 15 years ago. Since then the People's Republic has continued to fail to respect its basic WTO obligations. The EU must not waiver. Any deal would be an unlimited licence to dump," added Nitzschke.