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Fair Trade: May 2013 Update

Fair Trade - May 2013


EXECUTIVE SUMMARY

The Aluminum Extruders Council (AEC) has led the U.S. aluminum extrusion industry in achieving level
competition by winning tariff protection that offsets unfair trade practices of extruders/importers of
aluminum profiles produced in China. Our efforts have been of enormous value to domestic extruders
and suppliers. They may have saved our industry. Conservatively, AEC estimates 600 million pounds
per year
of extrusions are being produced in the U. S. that would have otherwise been lost to China.

Fair Trade tariffs have worked. They brought customers back to the U.S. that had been lost and rescued
customers that would otherwise have left. But the stakes remain high! Efforts to circumvent, dilute or
eliminate this crucial protection will continue for years to come. In June 2011, soon after the imposition
of these historic tariffs, AEC - your trade association - assumed financial responsibility for maintaining
and defending the tariffs from challenges, legal and illicit. AEC will continue this defense so long as the
industry continues to fund it. That's where you come in! To maintain the defense that the industry
needs, AEC will need your help and financial support.

Here is an overview of the situation:

BACKGROUND

November 2006: Sounding the Alarm Bell

  • Following a tour of extrusion plants in China, fifteen AEC extruder members in Canada and the U.S.
    form an informal committee and, soon after, ask AEC to organize the effort to bring a trade case.

July 2007: Predatory Trade Practices

  • AEC agrees to proceed with an evaluation and hires legal counsel. Their report proves that we have
    a strong trade case but they recommend the industry wait until import penetration goes higher than
    the then-current 3.6%. Not wanting to wait, the Canadian extruders decide to proceed on their own
    and move forward with their case, which results in a protective tariff for Canada by late 2008.

January 2010: The Threat Reaches Alarming Proportion

  • Mired in a recession, U.S. extruders now see Chinese import numbers absolutely explode, reaching
    an astonishing 21.3% of the total U.S. market at its peak! As China moves aggressively to dominate
    the U.S. extrusion market via unfair trade practices, the Aluminum Extrusions Fair Trade Committee
    files its trade case. Facilitated by AEC, the Committee wins an initial set of duties in August 2010.

May 2011: U.S. Market Saved by Tariffs (Price Tag = $3.0 million)

  • The preliminary findings are upheld in May 2011 by the U.S International Trade Commission. As the
    tariffs take effect, fair markets are restored and customers begin returning to U.S. extruders. The
    industry has won! Cost to the Committee members totals approximately $3.0 million in legal fees.

May 2011 - May 2013: Initial Defense Successful (Price Tag = $1.5 million)

  • Believing that maintenance of the tariffs will last two years and will cost in the range of $1.25 to
    $1.5 million, AEC assumes responsibility from the Fair Trade Committee for the task of defending
    the tariffs from legal appeals, scope challenges, and "circumvention" (illegal tariff avoidance).

  • AEC implements a plan to raise the money to pay for this initial defense via mandatory assessments
    on member dues, totaling $500,000 per year for three years (2012 - 14). This plan is succeeding.


Present - 2016: Shall We Stop Now or Keep Going? (Price Tag = $1.25 million per year; a total of $5.0 million)

  • So far, our defense has held fast. We have maintained the tariffs despite an unprecedented number
    of legal appeals, almost fifty (50) requests for waivers (known as "scope requests") and dozens of
    circumvention reports. High tariff amounts (400% for most imports) and an extremely broad scope
    maximizes relief to besieged U.S. extruders, but also makes for an inviting target for legal challenge.

  • AEC is also now defending the tariffs in a series of annual Administrative Reviews, significant events
    that consume more resources as the U.S. government accepts arguments for recalculating amounts.

  • This effort is much bigger and longer lasting than we expected. Estimated cost for maintaining the
    U.S. Fair Trade tariffs is $1.25 million per year through the end of 2016. AEC is seeking additional
    voluntary funding, asking only that each company in our industry do their fair share. Without this
    funding, AEC will be forced to end our defense of the tariffs. If that happens, the tariffs could be
    eliminated and gains realized by U.S. extruders could be lost forever. Please don't let that happen.

Download a .pdf version of this update here
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