EU steel producers declare war on China

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European steel workers protest against China's dumping price in Brussels, Belgium, 15 February 2016

EU steel producers declare war on China


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Thousands of steelworkers and representatives of trade unions staged a protest today in Brussels calling on the EU to refrain from granting China the status of the market-economy. If the EU eventually decides to take this step, it will flood the European market with cheap Chinese steel exports and wipe out hundreds of thousands jobs warned the organizers of the protest.

5,000 workers and industry leaders from 19 member states gathered today in front of the European Commission demanding the EU to stop China’s dumping and reject the market economy status (MES) to one of the biggest economies in the world.

However, the EU is seeking big Chinese investments in a €315bn EU investment plan designed to relaunch growth in Europe.

“We are marching on Brussels today by the thousands to give a clear message to EU policy-makers: ‘Say YES to jobs & fair trade; and say NO to market economy status for China!” said Milan Nitzschke, spokesperson for AEGIS Europe, an alliance representing 30 key industries, including steel, aluminum and ceramics.

epa05162059 European steel workers protest against China's dumping price in Brussels, Belgium, 15 February 2016. The demonstration of European Steel Association (EUROFER) and Workers of steel industry has been organized following a severe downturn in the price of steel caused by a flood of imports into Europe from China. EPA/STEPHANIE LECOCQ

“75% of all the EU’s anti-dumping measures already involve China. EU Trade Commissioner Cecilia Malmström has been swamped by new complaints about unfair Chinese practices in recent weeks. While factories are closing daily across Europe, how can the European Commission openly talk of surrendering MES to China?” added Nitzschke.

Last month, David Borrelli, a member of the European Parliament had already warned the EU against granting the market economy status to China, as such a step, if it was taken, would contradict the EU’s international trade rules. “The issue of granting MES to China cannot be limited to a legal quarrel, or, even worse, to just a simple mechanic automatism which has no legal ground; the unlikely accession of market economy status will have a deep impact on our European social system and industries. Many jobs are at risk in Europe, and this is a scary reality!” said Borrelli.

At present, Beijing is treated as a “non-market economy” as it was the principal access condition laid down by WTO in 2001, when China joined the organization. This status allows the country’s trading partners to calculate anti-dumping margins on dumped products without strict comparison with domestic prices or costs in China, using a so-called ‘analogue’ country methodology. 

“The reason we don’t want China to become a market economy status is because the EU would no longer be able calculate anti-dumping margins on the basis of a third or ‘analogue’ country. The other message is that we need to put a stop to dumping; much faster and more effectively, because at the moment dumped products are flooding the EU market.” said Charles de Lusignan, a representative of Eurofer, the European steel industry.

Today, China has an overcapacity of about 400 million tons of steel a year, which is almost 3 times EU’s demand. “That has a pricing effect on European steel because suddenly you can’t sell steel at a price you could make a profit on. 7000 steel industry jobs have been lost in the EU last year!”, de Lusignan added.

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