Singapore 15/04/2016 - China has agreed to end the export subsidies of a range of products including those of aluminium, the US Trade Representative office (USTR) said Thursday.
The USTR said that China has agreed to end a program known as its “demonstration bases-common service platform” in which it provides export subsidies to Chinese companies in seven economic sectors, including advanced materials and metals, which encompasses aluminium, titanium and specialty steel products.
In a Memorandum of Understanding signed between China and the US on Thursday, China has agreed to take actions regarding the program, which includes removing central government funding to the Common Service Platform (CSP) program and terminating preferential service agreements between sub-central governments and CSP providers, the USTR said.
The agreement comes after the US filed a complaint with the World Trade Organisation in February 2015 about the program that it said “provides prohibited export subsidies to Chinese enterprises located in 179 industrial clusters throughout China known as ‘demonstration bases’."
China’s exports of aluminium products have been the subject of contention particularly in the US, where domestic producers have accused China of unfair trade prices in the aluminium market.
Earlier in April, the US International Trade Commission said that it had launched an investigation into the US aluminium industry and global aluminium trade.
The US commerce department has also started a probe into China Zhongwang Holdings, whom the US aluminium Extruders Council alleged had “systematically and illegally evaded duties” on aluminium extrusions imported into the US.
China currently has a 15-percent duty on the export of primary aluminium but shipments of semi-finished and finished metal are tax-free. The country offers a refund of value-added tax (VAT) on exports of some products, reducing the cost and making it more competitive in foreign markets.