EU dropped aluminium scrap duty plan over India concerns

The European Union abandoned a proposal for an export duty on aluminium scrap over concerns it could complicate the final signature of a free trade deal with India, sources familiar with the discussions said. Instead of the duty, which aimed to preserve Europe’s smelting industry and support sustainability goals, the EU will rely on its environmental rules to curb scrap exports. The abrupt cancellation of the levy, which was set to be announced on September 23, represents a reversal by the European Commission, laying bare divisions within its ranks over the protection of industry as U. S. tariffs reshape global trade and China climbs the value chain. Last week, the office of EU industry chief Stéphane Séjourné said he would ditch the measure after internal negotiations left the draft covering only half of aluminium scrap.

While he did not give a detailed explanation of his decision, a draft of the abandoned proposal seen by Reuters showed the Commission had prepared to set a 15% export duty on aluminium scrap for three years. The industry had asked for 30%. An annex, meanwhile, listed 91 countries and territories to be exempted from the duty including top buyer India. India accounts for about a third of EU scrap exports, and Indian government officials told Reuters in late June that New Delhi had asked Brussels for relief from the planned curbs. Commission President Ursula von der Leyen is expected to sign the trade deal with Prime Minister Narendra Modi in December. And the sources said Indian pressure prompted the measure’s dilution. “The Commission president’s cabinet and (Directorate-General for Trade) successfully excluded India from the proposal, making it worthless for the industry,” one of the sources said. All of the sources, who include industry figures and…