Brussels, 08/02/2016 (Agence Europe) - In a letter to the Commission and the Dutch Presidency on Friday 5 February, the ministers of the economy of seven member states - Germany, Belgium, France, Italy, Luxembourg, Poland and the United Kingdom - warned of the “imminent” risk of the collapse of the European steel industry, which is hit by the dumping practised by China and its production overcapacity.
In a letter to the Vice-President of the Commission responsible for Investment, Competitiveness, Growth and Employment, Jyrki Katainen, and his colleagues for Trade, Cecilia Malmstrom, and Industry, Elizabeta Bienkowska, plus the Dutch Minister for industry, Henk Kamp, the German minister Sigmar Gabriel, Kris Peeters of Belgium, Emmanuel Macron of France, Italy's Federica Guidi, Etienne Schneider of Luxembourg, Mateusz Morawiecki of Poland and Sajid Javid of the UK, called upon the EU to “use all available means” and “take strong action” to ensure fair competition conditions for the European steel industry, which is still reeling from the economic crisis of 2008.
“The EU cannot remain passive when rising job losses and steelwork closures show that there is a significant and impending risk of collapse and the European steel sector”, the ministers argue, calling for the trade defence instruments and other available tools to support and modernise the European steel industry to be used.
First of all, the “Commission should make full and timely use of the full range of EU trade policy instruments”, they stress, calling for the adoption of “swift and appropriate measures” in the anti-doping cases underway such as the investigation into imports of cold-laminated flat steel products from China and Russia and taking account of the calls to open an anti-dumping investigation into imports of hot-laminated flat steel products from China.
The ministers urge the Commission “not (to) wait until the damage from unfair practices becomes irreversible for our industry” before setting anti-dumping measures in place. They call upon the Commission, in the framework of the current anti-dumping regulation of the EU, to be prepared to open ex officio investigations (in other words, on its own initiative), to set measures in place on the basis of the “threat of harm” when the evidence justifies this and to speed up the pace of investigations before putting trade defence measures into place. They also call for “new efforts” to adopt a package of measures to modernise the trade defence instruments (TDI), in order to “simplify and speed up procedures, increase the transparency, efficiency and implementation of the anti-dumping measures”.
The ministers also want to ensure that the European regulation preserves the competitiveness of energy intensive industries. They therefore consider it “of the utmost importance” for the European steel industry that the guidelines of the October 2014 European Council “be fully implemented” to prevent carbon leakage and relocating production outside the EU.
In addition they call for “other methods to be explored” in order to avoid the decline of the steel industry and to ensure its long-term sustainable development - like support to technological development and low carbon emission industrial processes, or support to innovation through the Horizon 2020 and SPIRE programmes, the research fund for coal and steel and the EFSI.
This call, initiated by French Economy Minister Emmanuel Macron, comes a few days after European Commissioner for Trade Cecilia Malmström asked China to reduce the overcapacity of its steel industry and announced the opening of three new anti-dumping investigations in February into the imports of Chinese steel products, warning that other investigations could follow.
In a letter to her Chinese counterpart, Gao Hucheng, on 29 January, Malmström welcomed the Chinese plans to reduce steel production, but demanded that they now be translated into action. She expressed her concern at the nearly 50% surge in Chinese steel exports that was noted in 2015, and at the resulting fall in prices (by a half for some products) which have brought many steel sites to a halt and caused the disappearance of thousands of EU jobs, with tens of thousands of other jobs in Europe still under threat.
“In the wake of a worrying trend, I urge you to take all appropriate measures to curb the steel overcapacity and other causes aggravating the situation”, Malmström stated.
“The Commission is well aware of the problem. We are taking action and applying the instruments we have available to ensure fair competition. We have raised this issue with our trade partners. Our action includes the swift and timely use of trade defence instruments, the Juncker plan for investment, and the action plan to support energy intensive industries. We will shortly open anti-dumping investigations. We are open to any proposal that the member states would like to table”, a Commission spokesperson, Lucia Caudet, said on Monday 8 February.
“As regards the ex officio complaints, this is provided for in the current legislation but it is for the industry to provide us with the proof. For the modernisation of the trade defence instruments, we made a proposal in 2013, which is in the Council's hands”, she added.
The Commission is organising a conference on the European steel industry, which will take place in Brussels on 15 February. The steel issue will be on the agenda of the Competitiveness Council on 29 February.
Steel is one of the difficult issues at the centre of the ongoing thorny debate on granting China market economy status (see EUROPE 11482). (Original version in French by Emmanuel Hagry)