UK must stop blocking EU from taking action against China steel dumping
The fallacy of Brexit campaigners claim that the EU is preventing the UK from taking action against China dumping cheap steel has been exposed with the government’s announcement today that its plans to part-nationalise the steel industry would be compatible with EU state aid rules.
As the TUC makes clear in our briefing, the UK government can and should use the range of tools the EU provides, including state aid, to support the steel industry as other EU countries such as Italy have done.
The European Commission is currently looking at ways to change its rules on tariffs against China which has included a public consultation to which the TUC made a submission last week accompanied by a letter from the TUC General Secretary to the EU Trade Commissioner.
The letter calls for stronger measures to be implemented against the dumping of Chinese goods and for China not be granted what is called ‘Market Economy Status’ (MES). The ETUC also opposes China being granted Market Economy Status, as do steel employer groups.
Market Economy Status is the term for a country where the market sets the price for goods domestically. This it is obviously not the case in China where the state determines prices and has kept them artificially low for goods such as steel. It has subsidised the overproduction of steel which it is dumping on European markets, driving producers from other countries out of business, such as Tata Steel which announced earlier this month it would be closing its plants in the UK.
The views of European member states are crucial in determining the final decision of the European Commission on whether to grant China MES and the kind of anti-dumping measures it develops.
The TUC has expressed concern that since April 2014 the UK has been leading a group of countries (which include Austria, Ireland, Netherlands and Sweden) to block attempts by the EU to remove what is known as the ‘lesser duty rule’ which would allow higher tariffs to be levied against China.
When trade ministers across Europe will meet to consider this issue on 13 May, the TUC will be calling on our trade minister Sajid Javid to stop blocking the removal of the lesser duty rule and for China to not be granted Market Economy Status.
As Judith Kirton Darling MEP recently pointed out:
‘This is not about protectionism, it’s about fair trade. No markets work without regulation. The current measures are too weak and too restrictive in Europe and everyone is waiting for the UK to adjust its position so we can take proper action.”
The TUC is also calling for trade unions to have the right to submit complaints around dumping, following similar practice in Australia, USA, New Zealand and South Africa. This call was made by the European Parliament in 2014 and welcomed by ETUC at the time, as well as proposals that labour standards should be included in criteria for anti-dumping cases.
The TUC and unions have welcomed the announcement of government support for the steel industry which plays such a vital role in our economy and employs half a million jobs directly and in connected supply chains.
It should not have taken a crisis to make the UK government realise the need to play an active role in supporting the steel industry. However, now the crisis is clear for all to see, the UK government must make use of its voice in Europe to take stronger action against Chinese dumping and provide a long term future for an industry on which thousands of workers and communities depend.