Tuesday, July 16, 2013

Aluworks wants action over Chinese dumping


Aluworks Limited says Government must implement as a matter of urgency the proposed countervailing measures agreed with the World Trade Oragnisation (WTO) by the Tariff Advisory Board of the Ministry of Trade and Industries, to halt the onslaught of cheap goods from Chinese exporters.
 
“We are not against Chinese imports and we are not looking for protection. We are simply asking Government to stand on the side of Ghana and say the export rebate that the Chinese use to make their goods extremely cheap in Ghana is unfair, as the WTO has agreed.

“This strategy, when implemented fully, will provide a level playing field despite the very high export rebates that Chinese traders enjoy, through which they are able to completely destabilise markets in Ghana and in West Africa,” said Mr. Kwasi Okoh, Managing Director, at the company’s annual general meeting with shareholders in Accra.

He stated that Nigeria used to have five rolling mills like Aluworks, but in the last six months four have collapsed due to the onslaught of cheap goods from the Chinese -- and the other one is barely surviving.

China, which became a member of the WTO in December 2001, has been criticised since then for its unfair trade practices including promoting dumping and lavishing subsidies on its exporters.

Countries such as the United States, Australia, India and Canada have all put in place countervailing measures to protect their aluminium and other industries from unfair Chinese competition.

A countervailing measure will typically require Chinese aluminium importers to pay a certain percentage of tax, equivalent to the amount subsidised by their Government.

Mr. Okoh disclosed that heavily subsidised aluminium products from China have led to excessive importation of such cheap and inferior products from that country by a few large- scale companies which sell to downstream operators that are traditional Aluworks customers, thus encroaching on its market.

“The Chinese are taking demand away from local manufacturers. We want Government to do something -- not because we just want to save Aluworks, but because we want to save manufacturing and the economy of Ghana.”

The share of manufacturing in Ghana’s GDP has been shrinking as the Chinese onslaught has also rocked other industries including textiles, wherein exporters from the world’s second-biggest economy have been accused of not only dumping but also pirating local designs.

Government is currently grappling with Chinese nationals’ involvement in the mining and retail sectors, but has taken a cautious approach as it remains one of the main beneficiaries of Chinese Government loans to African countries.

Aluworks directly employs 260 people, and supplies its products to more than 30 downstream companies and 130 other small-scale businesses. 

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