Europe’s steelmakers are urging EU leaders to take a tougher stance on unfair trade to help preserve the industry on the continent at a time when it is under pressure from cheap Chinese imports.
In a letter seen by the FT, top executives from more than 50 companies — including ArcelorMittal, Tata Steel and ThyssenKrupp —; have called on member states to bolster the bloc’s trade defences.
With China seeking the coveted status as a “market economy” in trade disputes, which opponents warn would give Beijing a “licence to dump”, European steelmakers also want Brussels to adopt a position similar to the US by refusing any status that would allow dumping.
The intervention comes amid ratcheting trade tensions and a rising tide of protectionism, as a popular backlash in the west against the perceived ills of globalisation grows.
Europe’s steel industry was battered by a collapse in prices for the metal last year, triggered by global oversupply and a wave of cheap imports into the bloc.
China in particular is accused of distorting competition by subsidising lossmaking companies and dumping excess material on to international markets at unfairly low prices. Brussels has enacted tariffs against types of steel from a number of countries, but critics say it takes too long to act and is insufficiently robust.
“EU trade defence instruments are very slow to deploy compared to our trade partners,” reads the letter, drafted by the lobby body Eurofer ahead of a European leaders’ summit in Brussels this week.
“In addition, the effectiveness of the EU anti-dumping instrument is uncertain, producing measures which are significantly below the calculated size of the of the dumping, often not even a 10th of US measures”.
Demands outlined in the text include the suspension, in certain cases, of the so-called “lesser duty rule”, under which EU duties are calculated. This would in effect remove a cap on levies.
The European Commission has already proposed a strengthening of the legal tools at its disposal, but there are deep divisions among members states. Britain is among a cabal of countries opposed to the plans, first put forward in 2013, despite heavy job losses in the UK steel industry over the past year.
A Commission spokesperson said: “[W]e need to reinforce our trade defence instruments to be able to face the challenges of globalisation.
“We have an unprecedented number of anti-dumping and anti-subsidy measures in place on steel products and we’re making full use of the available instruments. But these are not enough”.
The EU’s executive arm will try to unblock the legislation’s progress this week at the Brussels summit, at which trade policy will be one of the main topics.
The open letter also touches on the contentious issue of China’s desire to be classified as a market economy a status that Beijing says it is automatically entitled to obtain at the end of the year under World Trade Organisation rules. Supporters such as the UK say it would boost investment between Europe and China, but detractors believe it would become harder to impose tariffs.
While the debate in Europe has moved on from a simple binary answer to the question, steelmakers want the EU’s anti-dumping regulation to include the bloc’s own criteria for when a country is a market economy, with the burden of proof remaining on exporters into the single market.
The Eurofer letter also calls for a more favourable treatment for the sector under the EU’s emissions trading scheme.
Additional reporting by Arthur Beesley
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