Measuring distortions in international markets: the aluminium value chain

This report builds on the OECD’s longstanding work measuring government support in agriculture, fossil fuels,and fisheries in order to estimate support and related market distortions in the aluminum value chain. Results show that non-market forces, and government support in particular, appear to explain some of the recent increases in aluminum-smelting capacity.

While government support is commonly found throughout the aluminum value chain, it is especially heavy in the People’s Republic of China and countries of the Gulf Cooperation Council. Looking across the whole value chain also shows subsidies upstream to confer significant support to downstream activities, such as the production of semi-fabricated products of aluminum. Overall, market distortions appear to be a genuine concern in the aluminum industry, and one that has implications for global competition and the design of trade rules disciplining government support.