Monday

29th May 2017

Focus

Thousands protest Chinese steel dumping, urge EU to act

  • Protesters gathered in Brussels to urge the EU to stand up against China. (Photo: Eszter Zalan)

Thousands of demonstrators protested against Chinese dumping of steel on Monday (15 February), urging the EU to stand up to China and put an end to the dumping of subsidised goods on European markets, which they argue threatens jobs and investment.

Steel workers, industry leaders and MEPs gathered at the Schuman roundabout to urge the EU not to grant the country market economy status (MES), which is likely hamper efforts to stop the selling of more cheap goods.

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“We expect politics to make a decision against unfair Chinese trade policies. It endangers our home industry,” Gabriela Stramke, from the German Steel Federation of Düsseldorf, told this website at the protest, arguing that every third tonne of steel of the total global trade comes from China.

“It endangers our jobs,” she added.

Representatives of the steel industry warned that the EU Commission “massively underestimates” the effects of Chinese dumping on jobs, growth and investment in Europe.

“China is financing overcapacity, which leads to overproduction, which leads to selling below reasonable prices, below the cost of production. Nobody can compete with that,” said Milan Nitzschke, spokesperson for Aegis European alliance of about 30 European industrial sectors.

A letter sent to the EU Commission earlier this month by seven ministers from Germany, Italy, the UK, France, Poland, Belgium and Luxembourg underlined anxieties about Europe’s steel industry. The ministers urged the EU to step up action to help the ailing steel industry and stop cheap imports from China and Russia.

The commission says it is “aware” of the situation.

“The commission is acting and applying the instruments at its disposal to support and ensure a level-playing field,” commission spokesperson Lucia Caudet said, recalling that there are 37 trade defence measures in place on imports of steel products, 16 of which concern China directly.

The bloc’s executive last Friday launched further investigations and decided on provisional anti-dumping duties on cold-rolled flat steel from China and Russia, ranging between 13.8 percent and 16 percent for the Chinese companies and between 19.8 percent and 26.2 percent for the Russian ones.

But Geert Van Poelvoorde, president of European Steel Association (Eurofer), said these duties are too low, as the level of dumping is 60 percent.

“This is not helping,” he told a press conference Monday.

The commission argues that this is what is possible under current EU rules, and is the fastest available remedy.

Van Poelvoorde however was critical of the EU's capacity to act, saying that anti-dumping procedures took 20 months to come into effect from their launch, double the time of the US.

“This tsunami is coming, and the 20-month procedure is just out of this world,” he said, arguing that the industry will be more exposed if only the European market stays open to cheap Chinese steel, with 400 million tonnes of steel overcapacity in China in 2016, while the whole steel consumption per year in Europe is 150 million tonnes.

'We become completely naked!'

The protest comes as steel and other industries in Europe are fearful that if the EU grants market economy status to China under World Trade Organization (WTO) rules this year, they will be left defenceless against cheap Chinese goods.

Beijing argues that its designation as a market economy should be granted automatically in accordance with the pact it entered into when joining the WTO in 2001.

European industries are worried it will make it harder for Europe to impose anti-dumping duties on Chinese goods sold at low prices, as it would change the criteria for determining a “fair price”, thus lower the threshold for such probes and levies.

The EU Commission held its first orientation debate earlier in January and will come back to the issue before the summer.

Campaigners against granting China market economy status want the initials MES to become just as infamous as TTIP, the acronym for the US-EU free trade agreement that is currently being negotiated.

Industry representatives fear the move could threaten 3.5 million jobs in Europe and argue it risks reducing EU GDP by 1-2 percent.

“Then we become completely naked,” argued Geert Van Poelvoorde, adding that granting MES to China would mean EU anti-dumping measures are ineffective.

The commission argues that granting MES and anti-dumping investigations against China are “completely unrelated” issues.

In the meantime, commission president Jean-Claude Juncker welcomed into his office in Brussels representatives from the crowd of about 5,000 people.

“We are here to safeguard our jobs, our families and our future,” Kevin Hill, a steel worker from Wales, UK, told this website, adding cheap Chinese steel is undercutting prices in their industry and threatens jobs, although there have been no lay-offs at his company so far.

“The steel industry started out in Britain. We have lost the coal mines already, we don’t want to lose this industry as well," he said.

Divided EU debates China market economy status

The EU Commission will, on Wednesday, debate the sensitive issue of China “market economy status,” with nerves jangling in European industry over cheap Chinese goods.

MEPs: China is not a market economy

China should not be granted market economy status, say MEPs. The EU Commission says it is trying to find a solution to defend EU industry.

EU still divided on Chinese steel

Despite growing political pressure, trade ministers at a meeting Friday are not expected to reinforce EU trade defense against Chinese dumping.

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