Sunday, October 9, 2016

Brussels tries to resist dumping on chinese steel – The World

World | • updated | By

A chinese worker, on the 1st of October in  Qingdao, in eastern China.

Brussels has sent a very clear message to Beijing, Friday, October 7 : not letting the chinese steel at a low price to flood the european market, and laminating industries of the Union without doing anything. The Commission, chaired by Jean-Claude Juncker, has announced that it instituted on the same day of the anti-dumping duties “provisional” on imports of two types of products from China : “hot-rolled flat products of iron, non-alloy steel or of other alloy steel” and ” some heavy plates of non-alloy steel or of other alloy steel “.

The european customs authorities will be able to “overtax” these products during the next six months, the time that the investigations, “anti-dumping” launched in February by the Commission to be completed. These surcharges will of course be extended (in principle, five years) if the investigations are successful. The dumping, which is selling at a loss-below the cost price, is prohibited by the world trade Organization (WTO) and sanctioned within the EU.

Read also : The painful and difficult reform of the steel industry in China

The hot-rolled flat products imported into Europe will have to be a premium of 13.2 % to 22.6 % on the price of facial, according to the manufacturers chinese concerned, or 22.6 %, for example, in the case of Zhangjiagang GTA Plate Co). The plates of the chinese, they will be taxed 65.1 % to 73.7% of their import price, again depending of the steel plants.

retroactive Provisions

For hot-rolled products, the Commission has taken an exceptional measure : it authorizes the imposition of fees provisional anti-dumping even before the injury has been highlighted for the european industry. The institution has stressed on Friday that it had demonstrated a speed particular, in making these decisions, five weeks ahead of schedule. Finally, the institution has specified that the sheet metal from China have been scrupulously recorded by the customs authorities of the countries of the Union since this summer and that they could therefore apply anti-dumping taxes retroactive, a provision is also outstanding.

also Read : Steel : the merger of two chinese companies gives birth to the world’s number two

With these decisions, the number of anti-dumping taxes related to the steel reached a historical level in Europe : thirty-seven taxes have already been put in place, fifteen of which were for chinese products. Exploit to the maximum the law allows to preserve the european steel of the huge surplus of china is one of the priorities of the Commission Juncker, while hundreds of thousands of jobs (approximately 300,000) are threatened.

In fact, in China, the steel industry still running at full despite the slowdown in growth and continues to benefit from considerable subsidies. In early 2016, the european association of the steel was estimated that the country’s production could reach 400 million tonnes, more than double the production of the Union (170 million tonnes) this year.

Brussels would be as well armed as the United States, a country where taxes of this type are often two to three times higher

But the executive wants to go further – it is also the meaning of his communication of Friday. He pushes for the adoption by the twenty-eight member States, a regulation on “trade defence instruments” intended to ” strengthen the tools anti-dumping provision of the Europe. This draft regulation has been put on the table as soon as 2013, but is still blocked by a small majority of countries, refractories, ardent defenders of free trade.

” If we had disposed of the text, this is not to 22.6 % or 73.7% of surcharges that we would have been able to impose on the steels involved, but much more, “ slips a source european. Brussels would like to be as well armed as the United States, a country where taxes of this type are often two to three times higher than those of the Old Continent.

The Italians, the Germans and the French are clearly in favour of this text, the ex-minister of the economy Emmanuel Macron was one of his horses to battle, amount several times to the niche market in early 2016. The Commission has also managed to convince the Belgians and the Austrians to support its proposed regulations.

But it still lacks in particular the green light from the British, despite the difficulties of their steel (Tata Steel has sold its subsidiary in the United Kingdom). Brussels has a lot on the turn “protectionist” that seems to have operated the first minister, Theresa May, at least in his speeches.

also Read : Despite the Brexit, London seeks to influence the european decisions

New status of China in the WTO

Jean-Claude Juncker could again address this topic at the council of heads of State and government in europe on 20 and 21 October. For the Commission, it is all the more urgent to adopt this text which, by 11 December, the Union will have to decide on the “market economy status” to China within the world trade Organization.

There is no question of granting him this new status, jure-t-on in Brussels, but, from December, the special conditions related to the entry of China into the WTO will be ineffective. At the time, in 2001, the China that do not meet even the criteria needed for this status, the other countries of the WTO had been granted derogations to the rules of the organization : they could protect their industry by using methods of identification of dumping unfavorable to Beijing.

These derogations should therefore fall. The Commission said in July that it had found the parade to not deviate from the rules of the WTO while maintaining a level of protection of their industry at least as effective as today. A draft of the regulation entering into the details is expected by the end of October or early November.

But, to be completely armed against the surplus in chinese, the community institution insists : the other text, the one on the modernisation of trade defence instruments, is absolutely essential. The tone is set.

The european industry in the face of China

If Europe lowered its protections by granting China the market economy status, what would be the consequences for european manufacturing ? According to calculations carried out by the Centre for prospective studies and international information (Cepii) in a note to be published, the european imports from China could increase by 5 %… 21 %, depending on the scenario chosen. An increase that would be at the expense of China’s competitors. the ” The Europeans are not the only ones impacted, but also the business issues are important “, described Sébastien Jean, director, Cepii. The institute estimates that the industrial production is expected to fall between 1.8 and € 23 billion in Europe (i.e. between 0.04% and 0.32 % of the total production in 2015). Most of the damage would be registered in the steel industry, according to Mr. John, but also in the sectors of ceramics, glass, machinery and electrical appliances or renewable energy.


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