Germany Seeks Deal On EU Plan To Cut Aluminum Import Fees

BRUSSELS--Germany wants to soften a European Commission proposal to halve import duties on unwrought, non-alloyed aluminum, a spokesman for the German Presidency of the European Union told Dow Jones Newswires Monday.

In January the commission proposed cutting tariffs for unwrought, non-allowed aluminum to 3% from 6% retroactively from Jan. 1, 2007. It also called to eliminate the tariffs altogether by 2009.

Germany, which currently holds the rotating E.U. presidency, has proposed a compromise whereby the 50% cut wouldn't be retroactive to Jan. 1, according to German government spokesman Rainer Rudolph. The draft compromise also calls for a review of the tariff in three years instead of a move to abolish the tariff altogether, Rudolph said.

Poland has been the main driver to lower the duty, since many of Poland's aluminum manufacturers rely on Russian imports. However, the proposal sparked opposition in Germany, France and Spain, where many smelters are located.

A majority of Europe's 27 national governments must now agree to the details of the compromise. The various governments all agree the tariffs should decrease to 3%, a commission official said, but continue to bicker on the details of the plan.

The issue has been a source of contention in the E.U. since 1997, when non-E.U. aluminum producers first called on the E.U. to aluminum tariffs. Small and medium-sized companies which use unwrought, non-alloyed aluminum have also complained that the E.U.'s tariff forces them to pay more for aluminum than the market dictates.

Speaking in January, European Trade Commissioner Peter Mandelson said that lowering the tariffs would help to make these companies more competitive.

The E.U. consumes 5.2 million metric tons of primary aluminum a year, and produces 2.3 million tons, according to the Federation of Aluminum Consumers in Europe.