Monday, May 18, 2015

Fair Trade Update: AEC Advances Legislative Agenda

Over the last few weeks the Aluminum Extruders Council (AEC), its members, and leadership have made their voice heard in the Trade Promotion Authority (TPA) bill making its way through Congress.  Adding our voice to manufacturers all across the country from the steel, solar panel, and tire industries (just to name a few), we aim to have the pending Customs Bill amendment adding to the historic TPA legislation.  As I write this month’s entry, AEC members and leadership are phoning, faxing, and emailing their elected officials asking for their support.  Hopefully, by the time you read this update, the results will be in, and we will have impacted a huge win for our industry and domestic manufacturing.

Of course, that effort is only part of the agenda being advanced by the AEC.  The Department of Commerce (DOC) issued its decisions regarding IKEA’s cabinet/drawer handles and IKEA’s towel racks. The Department found both sets of products to be in-scope merchandise. IKEA’s handles were each comprised exclusively of a single piece of extruded 6xxx-series aluminum alloy and packaged with steel screws and nuts for attachment onto a cabinet or drawer face.  This decision reinforces earlier precedents set by the DOC regarding extruded parts packaged only with a few fasteners. 

In late April the Chinese government issued a statement removing export duties on certain alloyed semi-fabricated products including rod and bar.  While this should have no direct impact in markets where trade protection exists for extruded products, it does raise concerns about the growing supply of aluminum in China, and how they intend to exhaust it.  Even while the Chinese economy shows signs of slowing its meteoric economic growth, production has not been curtailed.  Forced to find a home for this production, the Chinese continue to incentivize downstream manufacturers to fabricate the metal for export.  Another clear example is the recent announcement by Chinese extruder Guangdong Xingfa Aluminum Holdings, which plans to expand aluminum extrusions capacity to 500,000-tpy.  This comes at a time when Chinese extruders continue to operate at 30-40% of their capacity.  As reports of Chinese exports into third party countries mount, new allegations of circumvention of the U.S. trade orders are growing.  While difficult to draw a direct link, several investigations are underway that could lead to more indictments.

Finally, the DOC’s third annual review of our case is well underway.  A preliminary decision is expected in late June or early July.  We continue to argue for a surrogate country that is very close in its economic development to China.  Further, we have made our case known that if a curtain wall company seeks a special duty rate, then all input costs must be calculated including glass.  These are key issues for us in this cycle.

Next month, I will be heading to Washington D.C. for my final security clearance and first International Trade Advisory Committee (ITAC) meeting.  As you may recall, ITAC is a group of committees that represent U.S. industry interests and advises the United States Trade Representatives (USTR) office on trade policy.  I will represent the AEC on committee nine, which deals with non-ferrous and building and construction products.  This represents another big step forward for our industry in making its positions known, and its voice heard.  Once again, thank you for your continual support as we work together to build and defend the aluminum extrusion industry.