The European Union may trim a 6 percent tariff on aluminium imports to increase shipments from Russia and spur competition for producers in the EU such as Alcoa Inc.

The duty applies to unwrought aluminium and aluminium alloys, used for products ranging from cars and airplanes to packaging and electric cables. EU Trade Commissioner Peter Mandelson said he's considering whether to cut or scrap the levy on unwrought aluminium.

"We are actively working to find a balanced solution," he told reporters today in Warsaw. The aluminium duty, set at 6 percent for the past decade, also protects such manufacturers in the 25-nation EU as Alcan Inc., Norsk Hydro ASA, Glencore International AG and Rio Tinto Plc.

The entry to the EU of 10 mainly eastern European nations in May 2004 strengthened the case for scrapping the duty because new member states have aluminium-transforming industries that traditionally relied on Russian supplies.

Russian exports were so important to Hungary that it negotiated a delay in introducing the EU duty as part its entry accord. This included a zero rate during the first year of membership and then a three-step increase to 6 percent starting May 2007.

Poland

Poland and the other new members were forced to apply the 6 percent levy from the first day of membership. The Polish government earlier this week urged the EU to end the duty, a step that would have to be endorsed by national governments acting on a proposal from the European Commission, the EU's regulatory arm in Brussels.

"Hopefully, we are moving toward a solution that will be acceptable to Poland and other member states," Mandelson said. He declined to elaborate.

Some non-EU aluminium exporting nations are already exempted from the levy because of trade agreements with the bloc. For example, Norway can export the product duty free because it's a member of the European Economic Area and Mozambique gets the same benefit as a result of preferential EU arrangements for poor countries.

In addition, the EU is negotiating a full exemption from the duty for the Gulf Cooperation Council grouping of countries including Saudi Arabia and the United Arab Emirates as part of a planned trade accord with the region.

Russian exports

Russia would stand to benefit most from a general reduction or elimination of the duty on unwrought aluminium because Russian exporters such as OAO Russian Aluminium account for most of the EU imports that are subject to the levy.

The EU last year imported about 2.3 million metric tons of unwrought aluminium, of which 1 million tons were subject to the 6 percent duty. Of that amount, most came from Russia.

A plan to lower or end the duty for unwrought aluminium would be independent from a possible cut as a result of World Trade Organization talks. A new WTO agreement could lead to a near halving of the tariff on unwrought aluminium and aluminium alloys and would take a year or more to enact.

The EU last year imported about 2.1 million tons of aluminium alloys, of which 1.2 million tons came duty-free from Norway. Iceland, also a duty-free exporter through the European Economic Area, sold about 130,000 tons in the EU last year.