EU and national ministers met with policymakers and steel representatives from around the world last week to discuss the downturn in the steel industry across Europe. Once again, the call was made on world leaders and the UK government in particular, to stop blocking EU action to prevent the total collapse of the steel industry.
One of the core problems facing the steel industry is the dumping of cheap steel on the European market from China. Unlike other countries, Europe is working with outdated and inadequate trade defences as we try to cope with the 350m surplus of steel produced in China every year. That’s almost double the entire EU annual production.
More than 5,000 job losses have been announced in the steel industry since last autumn. As recently as last month, the Commission issued a communication calling for Member States to support its proposals, announcing that it “is now high time to back-up rhetoric with action and adopt swiftly the modernisation package.”
One of the key proposals on the table is for the EU to abandon its so-called ‘Lesser Duty Rule‘. This rule defines the tariff that can be applied to goods from other countries, such as China, that are being sold into the European market at subsidised prices.
While it sounds good on paper, it has led to some obscure anomalies, such as cold roll steel facing a capped duty of 16% - much lower than the 55% at which the steel was being undersold. World Trade Organisation rules don’t oblige the EU to apply this rule and other countries don’t use it. In the United States, the duties on Chinese steel would have been set at the full 55%.
Before the annual European Steel Meeting last Thursday, Labour MEPs called on UK steel minister Anna Soubry to work with our European partners to agree reforms ahead of the EU Trade Council meeting on May 13th.
Sadly however, our government is currently leading a bloc of 14 EU Member States in the European Council who are opposing these reforms. Of those 14 states, only the UK and Belgium have major steel industries. It would take only two of these 14 countries changing their position to bring an end to this blockage that has been in place since reforms were proposed in 2013.
The Conservative government must act now to bring an end to this obstruction and protect the jobs and livelihoods of the thousands of people in Britain that rely on the UK Steel industry.