MSCI Calls for Federal Action to Address Trade Law Violations Hurting the U.S. Aluminum Industry
Rolling Meadows, Ill., Sept. 29, 2016 — In testimony before the U.S. International Trade Commission (ITC) today, Metals Service Center Institute (MSCI) Board of Directors Vice Chair and President and Chief Operating Officer of O’Neal Industries R. Holman Head called for tougher government action to halt unfair and illegal trade practices, particularly by China, that have harmed the U.S. aluminum industry. Head urged “decisive action, and continued vigilant monitoring” in a program to address dumping, predatory pricing and currency manipulation.
“MSCI data shows that U.S. shipments of aluminum in 2015 were down nearly 20 percent since the pre-recession peak in 2006. Unfair trading practices by certain foreign governments, particularly China, whose economies are free market in name only are largely to blame for that,” Head said. “Global demand for aluminum has stagnated and declined. Meanwhile, according to U.S. government and International Aluminum Association data, the Chinese share of the global aluminum market has exploded from approximately 10 percent in 2000 to nearly 55 percent last year. China’s government subsidized aluminum production glut, currency manipulation, and other unfair trade practices have weakened the aluminum industry.”
MSCI member service centers supply industrial metals to approximately 300,000 manufacturers and fabricators, many of whom operate in an increasingly competitive global economy. Service centers represent an important outlet for domestic aluminum mills, purchasing more than an estimated 2.1 billion pounds of aluminum mill products in 2014 according to the Aluminum Association.
“Given this position within the aluminum distribution chain, MSCI believes our members’ interests mirror the ‘national interest,’” MSCI President and CEO M. Robert Weidner, III, said. “A healthy service center sector is generally indicative of a healthy aluminum industry, and a healthy U.S. economy. So it is imperative that service centers have both a strong source of domestic supply and a vibrant North American customer base of manufacturers.”
On behalf of MSCI, Head recommended that federal policymakers: 1) Vigorously monitor compliance with free trade agreements and promptly take action against violators; 2) Negotiate with trading partners directly to reduce global excess capacity; 3) Make it a stated principal objective of U.S. trade policy to target excess capacity in countries, such as China, that increase production through market distorting policies; 4) Expand efforts to enforce antidumping and countervailing duties, which currently cover only aluminum extrusions; 5) Declare that the Chinese government is a currency manipulator and immediately initiate negotiations to address the causes of the undervaluation; and 6) Resist efforts by China to be declared a “market economy” in the World Trade Organization, which would help insulate it from investigations and enforcement actions aimed at its market distorting, unfair trade practices.
MSCI also submitted a written statement to the ITC on this topic earlier this month.