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01/09/2016

Commission calls for input to prevent dumping from China

Trade & Society

Commission calls for input to prevent dumping from China

Celebrating Chinese-Belgian ties. Brussels, 6 February.

[Joel Schalit/Flickr]

The European Union launched a public consultation on Wednesday (10 February) into whether to relax trade defences against China, as pressure mounts from the steel sector, which is fiercely opposed to a move that would make it harder to impose anti-dumping duties.

The online consultation with industry, member states and trading partners is due to run for 10 weeks, and sets the stage for the executive to make policy recommendations in July.

Europe’s steel industry is bleeding jobs, as prices have hit decade lows due to overcapacity, shrinking demand, and a flood of cheap imports, mostly from China.

Next week, the steel industry has organised a march in Brussels to protest against Chinese dumping on the EU market and the granting of Market Economy Status to China.

>>Read: EU trade ministers to hold first talks on granting China MES

“We will have colleagues from the steel industry come to Brussels from over 15 EU member states,” said Axel Eggert, Director General of EUROFER. “They will be joining thousands of employees, employers and Trade Union representatives from the heights of European industry.”

“The march and accompanying manifesto strike at the heart of the challenges facing the European steel industry. We are staunch advocates for free and fair trade. Dumped steel imports from China, volumes of which have doubled in 18 months, are flooding the EU market and directly causing irreversible closures and job losses across the EU steel sector”, said Mr Eggert. 

On Monday (8 February), European industry employees, trade unions and employers launched a European Industrial Manifesto for Free and Fair Trade.

Milan Nitzschke, spokesperson for AEGIS Europe, an alliance of 30 European industrial sectors including steel, aluminium, ceramics, glass, solar panel, said, “European employees, trade unions and employers are united in their message to Brussels: China is not a market economy. The EU must not grant China MES. Chinese dumping destroys EU jobs and undermines free and fair trade. Europe cannot afford to put up to 3.5 million jobs and €228 billion in lost annual GDP at risk

>>Read: MEPs braced for fight over granting China ‘Market Economy’ status

The EU’s top trade official has warned China, whose exports to the EU have doubled in the past 18 months, that it will open three new anti-dumping investigations this month on steel imports from China.

“The European Commission is downplaying the massive damage MES would cause to European jobs and growth. It is hiding behind technicalities to please China,” Nitzschke pointed out.

“In keeping with the Juncker Commission’s own Better Regulation principles, the European Commission must conduct a full impact assessment of China MES, including a broad and public consultation,” he added. “Our Manifesto highlights the reasons why China’s MES should be rejected in 2016.”

Background

When China joined the WTO in 2001, it was considered a centrally planned economy, and the terms of its accession required the country to be treated as a "non-market economy" for 15 years.

In a nutshell, prices and costs were regarded as artificially low and unreflective of normal market forces due to state subsidies that its domestic industries enjoyed. As a result, it was easier for other countries to launch anti-dumping probes and impose high duties on Chinese exports.

Beijing has long interpreted the accord to mean that it would automatically be given MES at the end of 2016. Already, more than 90 countries, including the ASEAN states, recognise the MES of China. Australia and New Zealand have agreed to an FTA with China. However, the US, the EU and Japan haven’t given their say yet on the MES. They would need to pronounce themselves by the end of the year.

Timeline

  • December 2016: Decision on awarding China Market Economy Status.

Further Reading