Congress Urges Obama Administration to Press China to Remove its 9% VAT Rebate on Soda Ash
January 28, 2010
ANSAC, the world's largest exporter of soda ash, joins with Members of Congress in asking the Obama Administration to press China to remove its 9% rebate of its 17% value-added tax on soda ash exports.
A bipartisan group of 7 members of the U.S. Senate and 4 members of the U.S. House of Representatives sent a letter to U.S. Trade Representative Ron Kirk on January 28, 2010 asking that additional action be taken to compel China to withdraw its 9% VAT rebate on soda ash and urge that country to cease using VAT rebates as a tool of industrial policy. The letter suggests that a multilateral approach might be taken to engage with China on the issue.
ANSAC's President, John Andrews, thanked Members of Congress for their efforts to keep a spotlight on China's trade practices. “China's VAT rebate policy is an attempt by China to export its way out of recession. We appreciate the support of Members of Congress for the U.S. soda ash industry and for advocating the reduction of distortions in China's industrial sector so that U.S. exports are allowed to compete on fairer terms in the Asian market,” Mr. Andrews noted.
In July 2007, China eliminated its 13% VAT rebate on soda ash, as well its VAT rebate on over 350 other items regarded as highly energy consuming and polluting, in an attempt to deter the export of products deemed to have an adverse effect on the environment. The reinstitution of the VAT rebate for soda ash and other products resumes one of the many artificial supports for China's exports, and undermines the competitive conditions that allow environmentally-friendly U.S. natural soda ash exports to grow in the Asia-Pacific market, as well as others. It is a troubling development 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 voiced similar concerns about China's VAT rebate reinstatement.
ANSAC is the international marketing arm for four soda ash manufacturers in the United States: FMC Corporation, General Chemical, Solvay Chemicals, and OCI Chemicals Corporation. Since ANSAC's formation in 1984, American soda ash exports have tripled. The U.S. exports 42% 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 1,300 years. ANSAC is the leading exporter of soda ash to Asia and Latin America.
Signatories to the letter include Senator Mike Enzi (R-WY), Senator John Barrasso (R-WY), Senator Ron Wyden (D-OR), Senator Jeff Merkley (D-OR), Senator Joseph Lieberman (I-CT), Senator Frank Lautenberg (D-NJ); Senator Robert Menendez (D-NJ) ,Representative Cynthia Lummis (R-WY), Representative Phil Gingrey (R-GA), Representative David Wu (D-OR) and Representative James Himes (D-CT).
