UK blocks EU action on Chinese steel

03 March 2016

China is trying to sell massive amounts of steel below production price to all countries in the world. Would the UK be out of the EU it would still face the same problem: should it accept to buy heavily discounted steel and destroy our steel industry and communities in the process?

The WTO allows its members to take trade defence measures: they can apply an extra duty on dumped import, to correct the price and protect domestic industries. This policy is pursued very strongly by countries such as the US, where duties in excess of 200% are imposed on some Chinese steel products.

The EU is also imposing anti-dumping tariffs, but at a much lower level which is not sufficient to protect our steel industry: about 10 to 20% currently for most products.

But that not the European Commission fault: it actually proposed to change the rules back in 2013, so that much higher duties could be imposed. It's not the European Parliament's fault either: it adopted the Commission's proposal and even strengthened it thanks to some labour amendments.

The culprits are the EU's trade ministers, who act collectively as the "Council of the European Union": in order for the commission proposal to be enacted, it needs to be approved by both Parliament and the Council, but ministers have not been able to find a majority to adopt the proposal. That's because 14 countries strongly oppose raising the level of trade defence measures.

This group of countries is led by the current UK government.

So the problem is not the EU, but the Tories. If the UK government were to lift its opposition to this much needed EU reform, it would be adopted and steel would be properly protected across the EU. This UK government would not act any differently outside of the EU than it does in Brussel: a tory-led UK outside of the EU would not protect steel better than the EU currently does.

It makes a lot of sense to have trade defence measures at the EU level rather than the UK level. With anti-dumping there's always a risk of economic retribution, and while China would think twice about retaliating against the EU and its 500 millions of consumers it may not be so cautious when dealing with the UK alone.

Do you think the North East needs its own voice in the EU exit negotiations?

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