European View

“Stop steel dumping,” seven European nations ask the EU

by Carmine Fotina and Matteo Meneghello

There’s never been such an historically favorable moment to defend the steel industry.
Seven European nations, in the midst of a discussion over China’s request for market economy status, have asked in a joint letter to the EU, for strong and swift measures to stop dumping in the sector caused by widespread overcapacity.

Italy has a particularly strong interest in the sector as it seeks to sell its money-losing national champion, the Ilva group, it is working with the Minister of Economic Development, Federica Guidi, and is one of the main supporters of strong action along with Germany and France.

They are joined by the UK, Belgium, Luxembourg and Poland in a common belief that EU industry is “at risk of collapse.”

Thus their request to “use every means available,” including trade barriers permitted by WTO and EU anti-dumping rules. The steel issue is inevitably intertwined with a battle currently underway on granting China the status of “market economy,” which would impact trade.

Italy, Germany and France are among the biggest opponents of the move, fearing it would weaken the arsenal of antidumping measures.

The letter from the seven nations asks for quick action and a probe into the cold-rolled steel coming from China and Russia and the hot-rolled steel from China.

From Brussels, the spokeswoman of the Internal Market Elzbieta Bienkowska, vice president Jyrki Katainen and Trade Commissioner Cecilia Malmström have referred to a “joint analysis” and recall that “things are already moving,” citing the opening of one antidumping investigation, and “three others on the way,” and official inquiries “which, however, require corroborating documentation from companies.”

The issue will be addressed during a Conference on Energy Industries to be held in Brussels on Feb. 15, with Eurofer, the European Steel Association, organizing a march of more than 5,000 people – workers, business leaders and union representative – in the Belgian capital to mark the event.

Italy will be present with Federacciai, which organized a charter flight to bring in a 160-member delegation of workers and business people led by the national trade group’s chairman Antonio Gozzi and general director Flavio Bregant. Some 15 members of the EU are expected to participate under the umbrella of Aegis Europa, an alliance of 30 European industrial sectors (some of those hardest hit by Chinese competition include steel, aluminum, ceramic, glass, solar panels and bicycles).

“China is not a market economy. It doesn’t meet either the EU or the WTO criteria,” said Eurofer’s director general Alex Eggert. “We’ll be marching to demonstrate the force of this conviction relative to the impact of Chinese dumping on jobs, growth and the environment.”

Eurofer notes that China currently has a productive steel overcapacity in its domestic market equivalent to 400 million tons, nearly three times EU’s total steel demand (155 tons). Over the last 18 months, according to Eurofer estimates, the volume of Chinese imported steel has doubled, accompanied by a 40% collapse in prices.

Over the past few days, China’s secretariat of state announced its first attempt to react to the crisis, unveiling a plan to eliminate up to 150 million tons of production over the next five years. The government also announced a freeze on licenses for new plants through 2020.