From the TUC

Unions on the march across Europe, USA and Canada to say no to Market Economy Status for China

25 May 2016, by in International

Today Unite, GMB and Community held a March of Steelmakers in London which brought steel workers from across the country to Westminster to demand the government ensure the responsible sale of Tata Steel’s UK assets and deliver a sustainable industrial strategy.

A key cause of the crisis currently facing the steel industry is the UK government’s failure to stop China dumping cheap steel, as well as other goods like ceramics and rubber, on our markets.

As Riz blogged previously, Brexit won’t save our steel – rather it would rather lump us with a government that has consistently stood in the way of the EU introducing higher tariffs against China in an attempt to court Chinese investors.

Indeed just two weeks ago the UK trade minister Lord Price had the opportunity to use an EU ministers meeting to push for stronger measures against trade dumping, but there is no indication he did so.

The UK government has also been one of the warmest supporters of China being granted Market Economy Status (MES) by the EU.

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 has lead to dumping on European markets, driving companies such as Tata Steel out of business.

Granting China MES would make it more difficult for the EU to impose high tariffs against dumped exports which would cause the crisis in the steel sector to esculate.

The EU is due to make a decision on whether China is granted MES later in the year.

Trade unions from across the EU, USA and Canada have released a joint statement calling as one for China to not be granted MES.

This adds to pressure created by a resolution passed by an overwhelming majority in the European Parliament which opposed China being granted MES.  Notably, it was Tory MEPs that were some of the few that voted against the resolution.

This resolution also called on the European Commission to:

‘take into account the preoccupations expressed by trade unions [and] industries … [and] ensure the defence of jobs in the EU and of EU social and environmental standards.’

Other countries are showing what effective action against dumping would look like.  The USA, which does not recognise China as a Market Economy, for example, has imposed 500% tariffs on Chinese steel.

Other EU countries, such as France and Germany, have been providing state aid for their steel industries for years which has meant that they are better able to withstand the impact of the glut of cheap steel now building up.

While the UK government’s announcement last month that they would part-nationalise the steel industry is welcome, this has come too late in the day for the thousands of workers who have already lost their jobs due to the closure of steel plants like Redcar.

If the government is truly committed to the thousands more workers in steel and connected industries whose jobs are on the line, some of whom were marching today, they would use their voice in Europe and in the G7 leaders’ summit meeting later this week to oppose China being granted MES and support stronger anti-dumping measures being developed.