LONDON (Reuters) - Representatives of the U.S. aluminum industry are speaking to EU counterparts and have written to British Prime Minister Theresa May urging action against what they says are “massive illegal subsidies” in China that threaten Western jobs.
Trade lawyers and some governments accuse China of unfairly subsidizing major industries in breach of the rules of the World Trade Organization (WTO), which it joined in 2001.
Following European and U.S. action to protect their steel industries from China, the U.S. this year has shifted the focus to aluminum.
It has lodged a complaint with the WTO and launched an investigation into whether Chinese imports compromise national security.
“The WTO and U.S. and European leaders must act quickly to ensure a fair playing field,” Michael Bless, CEO of Century Aluminum Company (CENX.O), told a news conference in London on Wednesday.
China says it supports the work of the WTO.
The aluminum industry, represented by the China Trade Taskforce, has written to May urging her “to actively engage with the WTO on this matter and press for action”.
“A strong WTO that acts swiftly in situations such as this will be a vital part of securing Britain’s post-Brexit future,” the letter seen by Reuters said.
The prime minister’s office had no immediate comment.
The industry leaders said they were also speaking to Brussels officials and to the Russian sector, which has floated the idea of an OPEC-style body for the aluminum industry.
Bless said he could not endorse that, but it was an “acknowledgement of the severity of the issue”.
When China, the biggest aluminum consumer, joined the WTO it represented just over 10 percent of aluminum production worldwide, the China Trade Taskforce said.
Now it is the world leader, accounting for more than 50 percent of global output and China’s Hongqiao (1378.HK) has overtaken Russia’s Rusal (0486.HK) as the biggest producer, while the U.S. and European sectors have shrunk.
Industry body European Aluminium said the number of primary European aluminum smelters fell by nearly 40 percent between 2002 and 2015.
Trade lawyers say the ascendancy of China’s aluminum sector defies commercial logic as it faces higher bills for energy - the biggest input cost - than the U.S. and Europe.
“China has no natural advantages other than illegal state support,” Alan Price of Washington law firm Wiley Rein said.
Century Aluminum, which is majority-owned by Glencore (GLEN.L), reported a first-quarter net loss.Part of the justification for the U.S. investigation into whether Chinese aluminum is a threat is that Century’s smelter in Kentucky is the only producer of high-purity aluminum required for U.S. combat aircraft.
In Europe, the main concern is how to maintain smelting capacity as part of a strong value chain, creating thousands of indirect jobs, rather than security, European Aluminium said in an email.
EU trade ministers, meeting in Brussels next week, are expected to discuss new rules on dealing with anti-dumping, which are likely to have most impact on Chinese imports.
additional reporting by Philip Blenkinsop in Brussels; editing by Susan Thomas