EU should not grant China MES until it becomes a market economy: European Aluminium

The European Commission proposed a deal for the steel sector in exchange for granting China the much sought after Market Economy Status (MES). This approach was debated by the College of Commissioners on July 20. The  European Aluminium Association is of the view that the proposal ignores the huge Chinese overcapacities in industries like aluminium and creates unfair distortions on the EU market.

European Aluminium Director General, Gerd Götz believed that the European Commission proposal to grant MES to China would go against the stand of their trading partners in the US against granting the MES to China. The US has warned China about not resorting to fair trade practise to qualify for MES. Even the elected representatives of EU in the European Parliament voted in May with an overwhelming majority on a Resolution against granting the MES to China.

Reacting to the EU Commission’s College orientation debate on the treatment of China in anti-dumping investigations, Mr Götz issued a statement:

“Today’s announcement by the EU Trade Commissioner put a focus on the need to reinforce trade defence instruments and a new methodology to calculate unfair dumping and subsidies. Still, the Commission was not clear on how this methodology will be applied, nor how effective it will be. European Aluminium is calling for a transparent approach involving Member States, the European Parliament and industry representatives. EU leaders must also recognise that state-supported overcapacities in China are affecting other sectors than steel. China’s overcapacity in primary aluminium is today five times the size of the EU’s entire production. This cannot be ignored by EU leaders”.