|China Soda Ash Export Rebate Position|
The Industrial Minerals Association – North America (IMA-NA) opposes the decision by the People’s Republic of China to offer its soda ash exporters a 9% rebate on the 17% VAT (value added tax). This practice is an affront to the free market, and contributes to greater levels of environmental degradation. IMA-NA urges the Obama Administration to express strong opposition to this practice and demand that the rebate be eliminated.
Soda ash is an essential mineral in a variety of products. It has a number of diverse uses that touch our lives every day. Glass manufacturing is the largest application for soda ash whether it is in the production of containers, fiberglass insulation, or flat glass for the housing, commercial building, and automotive industries. Soda ash also is used to clean the air and soften water. As environmental concerns grow, the need increases for soda ash used in the removal of sulfur dioxide and hydrochloric acid from stack gases. Chemical producers use soda ash as an intermediate to manufacture products that sweeten soft drinks (corn sweeteners), relieve physical discomfort (sodium bicarbonate) and improve foods and toiletries (phosphates). Household detergents and paper products are a few other common examples of readily identifiable products using soda ash.
Over 54% of U.S. soda ash production is exported. Its production and use support thousands of jobs, and it is the second largest export from the Port of Portland, OR.
Soda ash extraction and processing in the U.S. is environmentally responsible due to its natural occurrence. China’s soda ash production is accomplished through a synthetic process which creates calcium chloride as a byproduct. Calcium chloride contributes to environmentally harmful toxic sludge emissions. The Chinese method for soda ash production is energy intensive, and generates five times more waste than naturally-sourced soda ash. Significantly, the Chinese method produces twice the amount of greenhouse gas emissions.
The impact of the VAT rebate will be to artificially stimulate the Chinese export market. The result will be lower Chinese export prices at the expense of U.S. exporters. U.S. soda ash manufacturers will find it more difficult to compete, especially in the Asia-Pacific market. The already decreasing demand for soda ash due to a difficult economic climate, aggravated by this new rebate, have equated to a loss of jobs at U.S. soda ash facilities. The Obama Administration should explore all avenues of influence to end this practice.
IMA-NA is a trade association created to advance the interests of North American companies that extract or process industrial minerals, such as soda ash, used throughout the manufacturing and agricultural industries. IMA-NA stands ready to participate constructively in this important discussion regarding unfair Chinese trade practices.
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