Reverse China’s market status to save aluminium industry
Australia should reverse John Howard’s 2004 decision to grant China market economy status in a bid to prevent further flooding our local market with cheap aluminium, according to the Australian Workers’ Union.
A report released today by the McKell Institute points out Australia is alone among similar advanced market economies such as Canada, the US, UK and EU in recognising China as a market economy. Market economy status hinders Australian companies, unions and government agencies taking action against China for dumping, the practice of flooding the market with goods priced below the cost of production.
Dumping has decimated Australia’s aluminium industry, triggering a 44 per cent drop in employment since 2006, and a 15 per cent decline in output since 2010. The industry has suffered the closure of the Gove alumina refinery as well as aluminium smelters at Kurri Kurri in NSW and Point Henry in Victoria.
AWU National Secretary, Scott McDine, said it was time Australian politicians stood up for the national economic interest.
“Australia needs to stop being naïve about international trade and face reality. Our current trade settings are neither free nor fair. We are being gamed, and in the process, we are sending jobs offshore.
“Dumping is cheating, pure and simple. Among advanced economies, Australia has decided to go it alone in giving China market economy status. China has reciprocated by flooding our market with cheap aluminium, sold at the less than the cost of production.
“If Canada, the US, UK and EU won’t expose their markets to this abusive practice, why should we? Our current recognition of China as a market economy promotes the export of jobs and hinders us in taking effective action.
“As well as reversing China’s market economy status, we need more resources for the anti-dumping commission and bans on companies that are repeat offenders.
“The Canadians have figured this out. Their anti-dumping regime has supported local industry and jobs. Over the same period, Australia has gone in the opposite direction, and we now have one of the lowest rates of industrialisation in the OECD.”
“Asian government subsidisation of input costs and support for loss-making state-owned enterprises has resulted in unsustainably low export prices. The Australian industry cannot compete on a level playing field with dumped and subsidised Asian exports.”
“I went to the AFL-CIO convention in Pennsylvania and said that I would not tolerate attempts by China to solve its growing economic problems on the back of American workers. A few days later, they announced plans to keep propping up significant overcapacity in their steel production – meaning that they’ll keep unloading artificially cheap steel into global markets at the expense of countries and workers that play by the rules. As President, I’ll aggressively pursue trade cases and impose consequences when China breaks the rules by dumping its cheap products in our markets. And I’ll oppose efforts to grant China so-called “market economy” status, which would weaken our tools for dealing with this behavior.”
James Bouchard, founder, chairman and chief executive of steel services group Esmark,
"Whatever the lowest price is, whatever any country quotes through their trading companies, the Chinese will just come in and make it a lower price so there doesn't ever seem to be a bottom to the Chinese prices. They'll always take that order and that's had a very aggressive downward pressure on the American pricing."
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