Congress Asks Obama Administration to Address China's Soda Ash VAT Rebate
June 1, 2011
ANSAC, the world's largest exporter of soda ash, joins with Members of Congress in expressing concern over China's decision to maintain a 9% value-added tax (VAT) rebate on soda ash exports, which was reinstated in April 2009.
A bipartisan group of 7 members of the U.S. Senate and 3 members of the U.S. House of Representatives sent a letter to U.S. Trade Representative Ron Kirk and U.S. Department of Commerce Secretary Gary Locke on May 31, 2011 requesting that the Obama Administration immediately consult with senior Chinese government officials to seek an elimination of the VAT rebate on soda ash. In addition, the letter requests that the issue of the soda ash VAT rebate be specifically included on the Joint Commission on Commerce and Trade (JCCT) agenda in advance of its fall 2011 meeting.
ANSAC's President, John Andrews, praised Members of Congress for their continued focus on China’s trade practices and support of the U.S. soda ash industry. "The VAT rebate has been an outstanding issue for far too long,” said Mr. Andrews, noting that it has been over two years since China reinstated a VAT rebate on soda ash. “The sooner that U.S. and Chinese government officials can resolve this issue, the faster that U.S. soda ash exports can compete on a level playing field in Asian markets."
In July 2007, China eliminated its 13% VAT rebate on soda ash, and VAT rebates on over 350 products regarded as highly energy-consuming and polluting were eliminated in order to deter the export of products that have an adverse effect on the environment. But less than two years later - in April 2009 - a VAT rebate on soda was reinstated. The VAT rebate is one of many artificial supports for China’s exports that undermine the competitive conditions that allow environmentally-friendly U.S. natural soda ash exports to grow in the Asia-Pacific. It is a troubling policy that is not in China's long-term environmental or economic interests.
Other U.S. manufacturing sectors, including the U.S. steel and aluminum industries, have also voiced strong concerns about China's VAT rebate policy.
Signatories to the May 31, 2011 letter include Senator Mike Enzi (R-WY), Senator John Barrasso (R-WY), Senator Ron Wyden (D-OR), Senator Joseph Lieberman (I-CT), Senator Jeff Merkley (D-OR), Senator Robert Menendez (D-NJ), Senator Frank Lautenberg (D-NJ), Representative Cynthia Lummis (R-WY), Representative David Wu (D-OR) and Representative James Himes (D-CT).
ANSAC is the international marketing arm for three soda ash manufacturers in the United States: FMC Corporation, General Chemical and OCI Chemicals Corporation. Since ANSAC's formation in 1984, American soda ash exports have tripled. The U.S. exports over 50% of its total soda ash production. ANSAC's soda ash exports are sourced from the Green River Basin of Wyoming, which has reserves that can supply the entire world for more than 1,000 years. ANSAC is the leading exporter of soda ash to Asia and Latin America.