Importers of Russian aluminium hit on duties

By Simon Taylor

Date: 08/06/06

Poland and seven other EU countries may be made to wait until next year for an end to duties on imports of Russian aluminium, according to EU officials.

The Polish government has made a formal request to the European Commission to scrap the 6% import duty levied on imports of unwrought aluminium from Russia.

Poland argues that the duty is restricting supplies of primary aluminium for smelting for producers based in the EU.

The Polish request has been supported by the Czech Republic and Italy and won the backing of five more countries at a meeting of competitiveness ministers on 29 May.

Member states' trade experts discussed the issue of cutting the duty at the last 133 committee meeting on 2 June but made no progress.

Those resisting the Polish request want to tie any change in the duty to the renegotiation of the Partnership and Co-operation Agreement (PCA) with Russia, which could expire at the end of the year, meaning that the duty might not be altered until 2007 at the earliest. Negotiations are expected to start in the summer and may take at least six months.

Poland and other new member states including Hungary and the Czech Republic are particularly affected by the duty because they used to import Russian aluminium duty-free. But on joining the EU in May 2004 they had to increase their duty rates to the EU's level of 6%.

The countries which want to increase imports argue that it is difficult to meet demand for primary aluminium because of the duties, especially for independent smelters without the global supply networks available to large multinational aluminium firms.

EU-based smelters supply only two-fifths of the Union's overall demand while Poland imports around two-thirds of all the primary metal it uses, according to Polish government information.

But changing the current duty level is opposed by a number of member states, including Germany. EU officials say this is because there are large smelting plants based in Germany.

To alter the duty rate, the Commission needs to present a formal proposal which would have to be approved by member states.

The EU imported around 2.3 million tonnes of unwrought aluminium in 2005 of which one million tonnes was subject to the duty. Most of the latter came from Russia.

The Union wants to use the negotiations on a new PCA, which will probably be renamed a Strategic Partnership Agreement, to get Russia to agree to a number of the EU's policy priorities. These include establishing a long-term relationship on energy, based on open markets.

Article reports on the request of Poland and seven other EU countries to end duties on imports of Russian aluminium. Member states' trade experts discussed the issue of cutting the duty at the Article 133 committee meeting on 2 June 2006 but made no progress on the matter.