Brussels, 13/05/2016 (Agence Europe) - In light of the steel sector crisis, the Trade Ministers of the EU held a “constructive” discussion on the planned modernisation of the trade defence instruments, but will not revisit the controversial issue of the 'lesser duty rule', as a dozen or so members states are still against making any changes to this.
The ministers discussed the situation in the steel sector, “an urgent issue” following the Commission's recent strategy to rescue the sector, which was presented in March (see EUROPE 11512), the Dutch trade minister, Lilianne Ploumen, summed up.
“We have assessed the challenges caused by overcapacity in steel production at global level and the drop in demand as well as unfair practices driving prices down”, she explained.
With regard to this, the ministers also discussed the planned modernisation of the trade defence instruments of the EU, tabled by the Commission in April 2013 and at stalemate at the Council since December 2014 (see EUROPE 11202), whilst the European Parliament took position in April (see EUROPE 11063).
In this context, the ministers examined a document presented by Germany and France. “The procedures are currently taking too long; the sanctions mechanisms are such that they are not followed through. This is why, together with France, we have asked for the debate to be opened up on revising the trade defence instruments”, the German Secretary of State for Trade, Mathias Machnig, explained during a press conference.
“Two proposals have been put forward: the antidumping calculation method is to be tested with a view to recognising the market economy status of China, and the adjustment of the lesser duty rule”, he explained, adding: “developments on these points are extremely positive. Even on the side of countries hitherto critical, such as the United Kingdom, which is currently facing a serious crisis in its steel sector”, he concluded.
“The discussions were constructive, but did not allow us to reopen the question of the lesser duty rule. There is still a blocking minority in place, 12 or 13 member states still being opposed to any changes to the 'lesser duty rule'”, a Community source told us off the record.
Derogations to the 'lesser duty rule', which half of the member states are in favour of, would allow the Commission to impose corrective duty up to the total amount of the dumping margin, in certain specific cases.
However, the United Kingdom, one of the most pro-free trade countries, continues to oppose this. On Friday, the deputy trade minister, Mark Price, agreed on the importance of reforming the trade defence instruments, particularly speeding up the timelines of the investigation procedures, reconsidering dumping margins and examining anti-subsidy investigations “more seriously”.
However, Price continues to oppose any change to the lesser duty rule, stressing that it works well in 90% of cases of unfair Chinese imports and that it strikes the right balance to avoid retaliation measures. (Original version in French by Emmanuel Hagry with Pascal Hansen)