Defending manufacturing from Chinese dumping: #SaveOurSteel
UPDATE (Friday afternoon): ETUC General Secretary Luca Visentini has agreed with the TUC call.
Today, Trade Ministers from across the EU will gather in Brussels to discuss the threat posed to manufacturing by the dumping of products like steel and tyres on Europe by the Chinese. As part of the #SaveOurSteel campaign, the TUC has urged UK Trade Minister Lord Maude to reverse the Governmeny’s crazy policy that China should be granted Market Economy Status, and to stop blocking a renewal of the EU’s trade defence instruments.
The slowdown in the global economy, which the ILO fears could turn into a global recession next year, has reduced demand for manufactured products, especially in emerging economies like Brazil and China. That means that there is huge over-capacity of manufactured goods like steel and rubber, and prices fall. The Chinese government has responded by subsidising its manufacturing exports and selling them on the world market at rock bottom prices – known as ‘dumping’ – which undercut the price of such goods produced in the UK.
In market economies like Britain, that is leading to closures and redundancies in the steel industry. And instead of supporting measures to restore demand like raising wages and investing in infrastructure, including building new industries like carbon capture and storage, the British government is happy to see thousands of skilled workers on the dole, or forced into the sort of low productivity, low wage, zero hours economy we’re in danger of becoming.
Some other European countries like Italy, along with the USA, have responded to Chinese dumping by raising import taxes (tariffs), quotas and other barriers to defend their domestic manufacturing industry. The TUC is not in favour of using tariffs to defend expensive or inefficient industries, or to disadvantage developing countries. But we are in favour of using them – and other measures – to prevent abuses of the world trade system such as selling goods below the cost of production, because we need to defend our manufacturing capacity until demand can be restored to the global economy.
This is what Trade Ministers will be discussing in Brussels today. There is a proposal that, by the end of next year, the EU should give China ‘Market Economy Status’ (MES), which would give Chinese goods greater access to EU markets, and, if the Chinese government continues to subsidise those exports, that could seriously damage what is left of our manufacturing base.
So Frances O’Grady has written to Francis Maude urging him to reverse the Government’s support for that. And she has also urged him to drop the UK’s opposition to proposals from the European Parliament (way back in 2013) to update the EU’s other Trade Defence Instruments, so that dumping can be detected and prevented, including, for example, allowing trade unions to initiate anti-dumping investigations, and extending defences to cover social and environmental dumping.
The TUC General Secretary’s letter says:
“Granting MES to China would have a devastating impact on manufacturing in the UK and the EU, especially on investment and job creation. It would allow the UK and EU’s manufacturing core to be undermined by unfair trading practices and expose our main markets to unlimited Chinese dumping.”