WRITTEN QUESTION E-1196/97 by Klaus Lukas (NI) to the Commission (3 April 1997)

Subject: External tariff on aluminium

I have been informed that the introduction of an EU external tariff on aluminium from third countries has resulted in a significant worsening of the competitive position for European aluminium processing firms.

I understand that the main beneficiary of this external aluminium tariff is the aluminium industry in countries associated with the EU. These firms can import the necessary raw materials or additives without incurring any EU external or anti-dumping tariff and by remelting can manufacture their own products which they can then export tariff-free and thus(at a correspondingly low price) to the EU.

- Why has the import of unwrought aluminium been made subject to an EU external tariff?

- Why has an anti-dumping tariff been imposed on additives rare in the EU (such as silicon) which are needed for the manufacture of aluminium alloys?

- How were the effects of these tariffs on the European processing industry assessed?

- What are the consequences of these tariffs for the European processing industry?

- How many jobs are likely to be lost as a result?

- Why have no measures been taken in the relevant regulations to prevent a worsening of the position for the European processing industry?

- How is it that firms in countries associated with the EU have improved their competitive position?

- What further measures will the Commission be taking in this connection?

Answer given by Sir Leon Brittan on behalf of the Commission (13 May 1997)

Imports of unwrought aluminium are subject to a customs duty of 6% ad valorem resulting from the Community's tariff commitments in the World Trade Organization (WTO). Imports from countries associated or having preferential agreements with the Community (i.e. EEA and ACP countries) are exempt from payment of this customs duty. Exempt imports account for half of Community imports.

The effect of these duties on the competitiveness of the processing industry is generally very slight: it has been worked out that a 6% duty may have a 0.5% impact on the end cost of an aluminium can. The impact on the end cost of more sophisticated products is even less.

The European processing industry is also protected from international competition. For the sake of consistency the Community tariff arrangements include an average customs duty of 7.5% on processed aluminium products.

Only imports of silicon metal from China and Brazil are subject to an anti-dumping duty. These are specific duties instituted, under Community anti-dumping law, by Regulation (EEC) No 1607/92 of 27 June 1992 ((OJ L 170, 25 June 1992. )) and Regulation No 2305/92 of 4 August 1992 ((OJ L 222, 7 August 1992. )).

The impact of these anti-dumping duties on the users of silicon metal is very slight for two reasons: firstly, they are aimed at only two supplier countries; secondly, their estimated effect on aluminium alloys is negligible owing to the low silicon content of these (average: 2.25%).

Regarding the competitive advantage enjoyed by countries associated with the Community, to which the Honourable Member points, it is noteworthy that their tariff advantages were brought in by bilateral or multilateral agreements with the countries concerned which are a transitional phase in their accession to the Community. With this in view association agreements set up a programme for mutual liberalization of trade between the Community and those countries.

In more technical terms, it must be pointed out that under those agreements the Community has made every endeavour to adopt rules to promote harmonious and fair development of trade. With regard to the rules of origin, in particular, those agreements established the principle of no drawback of customs duties on (non-originating) imported materials used in the manufacture of goods intended for trade under the preferential arrangements laid down by those agreements.