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TRADE WARS
Lawmakers push to block Chinese takeover of US aluminum firm
by Staff Writers
Washington (AFP) Nov 3, 2016


White House warns China will take export markets without TPP
Washington (AFP) Nov 3, 2016 - The White House warned Thursday that failure to approve the Trans-Pacific Partnership trade pact will put billions of dollars in US exports at risk to competition from China.

Without TPP, which has been a hot-button issue in the US presidential campaign, China and other countries could move ahead with a rival regional trade pact, leaving US goods at a disadvantage.

This could put at risk 35 US export sectors that send $5.3 billion in goods to Japan's market alone, and employ 4.6 million workers, a White House official said.

The United States negotiated the TPP with 11 Pacific Rim countries, but the agreement's implementation has been stalled by the US Congress, which has not ratified it.

US Trade Representative Michael Froman told reporters the administration is committed to trying to get the deal approved in the last session of Congress after Tuesday's elections and before the next president takes office.

"We certainly have not given up on the lame duck. That is our focus right now. President Obama has made it abundantly clear that we are very much committed to getting this done," Froman said in a conference call.

He warned that the US trade picture will not stay as it is now if opponents get their way and defeat TPP.

"The world is not going to sit on sidelines but is going to move on without us."

Jason Furman, chairman of the White House Council of Economic Advisors, said a new study measures the impact of the potential for lost US exports to Japan, once a new regional trade deal lowers tariffs for Chinese goods.

The report looks at the Beijing-promoted Regional Comprehensive Economic Partnership currently being negotiated in the Asia-Pacific region, which has 16 members, including seven that also are in the TPP.

More than $225 billion in US exports -- roughly 10 percent of total US exports to the world -- go to the seven countries that are in TPP and also in RCEP. So Furman said the CEA study's estimates of harm to US industry are very conservative.

A group of US senators called on the government Wednesday to block the Chinese metals giant Zhongwang's takeover of a US aluminum processor for the auto and aerospace industries.

Writing in a letter to Treasury Secretary Jacob Lew, the 12 senators said the China Zhongwang Holdings group, already reportedly under investigation over alleged import tariff avoidance, should be blocked from the $1.1 billion purchase of Cleveland-based Aleris Corp on national security grounds.

The Committee on Foreign Investment in the United States (CFIUS), chaired by Lew to review foreign investments in sensitive US businesses, should review and reject the deal, they said.

"Zhongwang's purchase of Aleris would directly undermine our national security, including by jeopardizing the US manufacturing base for sensitive technologies in an industry already devastated by the effects of China's market distorting policies," they wrote.

The deal would create "serious risk that sensitive technologies and knowhow will be transferred to China, further imperiling US defense interests."

Zhongwang, China's largest aluminum processor, announced the deal to buy Aleris in August. Aleris processes aluminum for numerous industries, particularly the auto and aerospace sectors.

It has an auto industry plant in Duffel, Belgium and is building a new one in the southern US state of Kentucky. Aleris also makes aluminum parts for aircraft bodies and wings in plants in Koblenz, Germany and Zhenjiang, China.

The company also makes aluminum protective plating for military vehicles in Germany, a point on which the senators focused in their letter to Lew.

"Aleris's defense production demonstrates the type of specialized expertise and capabilities that provide the foundation for our defense industrial base," they said.

"Aleris' R&D and technology are critical to current and long-term US economic and national security interests."

The company denied the deal would threaten national security, saying it represents "continued investment in the future of American jobs."

"Less than one percent of our sales go into defense applications, and none of those goods are produced in the United States," spokesman Jason Saragian said in a statement sent to AFP. "The technology to produce aluminum plate, which is used in some military applications, is standard production technology widely used in the aluminum industry."

The senators also argued that China's huge overcapacity in the aluminum industry has led to the decimation of the US industry and "contributed to the hollowing of our nation's industrial base."

Zhongwang has already courted controversy in the United States.

The company is under federal probes over alleged smuggling of aluminum into the country disguised as pallets in order to avoid steep punitive tariffs on the company, the Wall Street Journal reported.

The US government determined in 2010 that China Zhongwang benefited from illegal subsidies and was dumping its products on the US market.


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