Sep 26

EU governments call on Brussels to tackle China over steel



A group of governments including the UK and Germany have urged the EU to step up its fight against cheap steel from countries such as Russia and China, warning that the European industry is at “impending risk of collapse”.
‘The European Union cannot remain passive when rising job losses and steelwork closures show that there is a significant and impending risk of collapse in the European steel sector’
Ministers from seven steel-producing member states — Germany, Italy, the UK, France, Poland, Belgium and Luxembourg — have put their names to a letter urging Brussels to take greater action to tackle unfair trade practices and “ensure a global level playing field” for the steel sector.
The letter ratchets up pressure on the EU at a time of deepening crisis in the European steel industry, which has lost more than a fifth of its workforce since 2008. A plunge in international steel prices has hit steelmakers around the world and many blame a surge of underpriced exports from China.
Brussels has some tariffs in place but industry figures accuse the European Commission of responding inadequately compared with countries such as the US.
Tata Steel said it would cut more than 1,000 jobs in the UK last month, adding to thousands of redundancies and plant closures in the country over the past year.
“The European Union cannot remain passive when rising job losses and steelwork closures show that there is a significant and impending risk of collapse in the European steel sector,” stated the letter, dated Friday and addressed to three members of the European Commission and a minister from the Netherlands and seen by the Financial Times.
“The commission should make full and timely use of the full range of EU trade policy instruments,” it said.
The signatories, which include UK business secretary Sajid Javid, have called on the commission to impose measures where there is a “threat of injury”. They also called for reform of trade defence instruments to make the process quicker, more transparent and effective, and for an investigation into hot-rolled flat products from China.
“We should not wait until the damage from unfair practices becomes irreversible for our industry,” the letter said.
The intervention, initiated by France’s economy minister Emmanuel Macron, came days after the EU’s top trade official called on Beijing to cut overcapacity in its steel industry. Cecilia Malmström, trade commissioner, said she would open three new anti-dumping investigations into steel products originating from China.
Sector representatives gave a cautious welcome to the contents of the letter. Gareth Stace of the UK Steel lobby group said: “It’s what we want to see from governments. But we aren’t out of the woods yet. In fact it could get worse before it gets better.”
Roy Rickhuss, general secretary of the British steelworkers’ union Community, said: “Governments across Europe are finally waking up to the steel crisis that we are facing.”
The commission said the institution had proposed modernisation of trade defence instruments in 2013 and that the proposal was lodged with the European Council of Ministers.
“There are 35 definitive measures in place on imports of steel products, 15 of which concern China directly. We have new ongoing investigations for six steel products, three of which concern China, and are always willing to look at well-substantiated cases that European producers bring forward to us,” the commission said.
Steel imports into Europe rose 29 per cent in the third quarter of 2015 compared with a year earlier, according to Eurofer, the continent’s steel association. Import duties slapped on concrete reinforcement bars from China last week were criticised by the industry as insufficient.
The letter also argued that in order to safeguard the competitiveness of sectors such as steel, the most efficient plants should not be subject to what it called undue carbon costs.

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