Europe’s steel industry calls for level playing field

Jason Ford - News Editor, The Engineer

Jason Ford
News editor

European steel producers are staging a march to protest about what they see as unfair trading practices by their Chinese competitors

In a relatively short space of time the EU’s economy has become linked with China’s to such an extent that the People’s Republic is now the Union’s second largest trading partner.

As such, the two economic blocks are reportedly trading over €1bn a day with figures from 2013 indicating €428bn in bilateral trade.

In a speech given in January this year, Cecilia Malmström, the European Commission’s commissioner for trade said: “Over three million jobs here in Europe depend on sales in China. And that’s an underestimate of the total value of the relationship, given the number of European companies who depend on imports from China to make their businesses competitive.”

The issue of Chinese imports unites company bosses, unions and workers from the European steel industry who are gathering today in Brussels to call for reforms in the face of steel being exported at prices below the cost of production, a practice more commonly referred to as dumping.

In the UK alone, the practice of dumping was cited by Tata Steel UK as a chief reason behind job losses at sites in Wales, Northants, and Co. Durham in January 2016.

“We are not asking for special treatment,” said Karl Koehler, Tata Steel’s European CEO. “Instead, we are asking for the European Commission to stand up for fair trade and to give European steelmakers a chance to compete on a level-playing field.”

Today’s march is being organised – with the support of Eurofer, the European steel association – under the umbrella of AEGIS Europe, an alliance of 30 European industrial sectors including steel, aluminium, ceramics, glass, solar panels and bicycle manufacturing, among others.

China’s ability to dump its steel in Europe will be greatly enhanced if it gains market economy status (MES) in December this year. According to US think tank Economic Policy Institute, granting MES to China would increase manufactured imports from it by 25–50 per cent, putting 1.7–3.5 million EU jobs at risk.

EU policy makers are being urged to rethink MES status to China unless it becomes a true market economy rather than operating a state capitalist system.

Under EU guidelines, China currently only fulfils one of five criteria under which is can call itself a market economy (the removal of barter trade) and that in 15 years of World Trade Organisation membership, China has not succeeded in allowing prices to be determined by market forces.

European steelmakers are also calling for the European Commission to ensure its post-2020 proposals to change the Emissions Trading System (EU ETS) do not lead to unfair costs, which are not borne by global competitors. According to a recent study, the proposed EU ETS reform may cost the steel industry alone about €34bn. They will also call on commissioners to scrap the so-called ‘the lesser duty rule’ whereby the EU seeks to achieve the lowest possible tariff on imports.
A European Industrial manifesto for fair trade – stop China dumping: stop China MES! Can be found at the following address: https://www.eiseverywhere.com/ehome/stopdumping-stopchinames/manifesto/?&