UK Government Blocks Steel Reform

29 February 2016

As trade ministers meet in Brussels and MPs in Westminster debate the steel industry, information uncovered by Jude Kirton-Darling MEP suggests that the government has been leading a coalition in EU negotiations which deliberately blocked reform of crucial EU trade dumping measures, particularly the lesser duty rule. Without this reform, EU instruments are weak in the face of aggressive, low cost steel dumping.

The lesser duty rule is that duties cannot exceed the limit of what is strictly necessary to prevent an injury for an EU industry, meaning that it can be lower than the actual dumping margin.

If the UK government had not taken this stance, the reform would have gone through, as there are only 14 countries in the coalition and there would have been enough countries for the reform to have a majority.

The information is an internal paper from a working group within the Council of Trade Ministers of the EU, which is responsible for anti-dumping. Dumping is a kind of predatory pricing, which occurs when manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production. The working group gathers top civil servants representing the views of their respective member states, and is the body which prepares the meetings at ministerial background.

This document is significant because it shows that the UK government has been part of a group opposing two key demands from both the Commission and the MEPs: including exemptions to the 'lesser duty rule' and extending the Commission's power to initiative investigations 'ex officio'.

The UK steel industry has been waiting for over two years for this reform, which could provide real solutions to address the steel crisis in the UK. Meanwhile the UK government has been blaming 'Brussels' for the crisis and is calling on the Commission to act.

Jude Kirton-Darling MEP said:

“Everyone who has been following this situation knows that the UK government has not just been a mere passive actor in this debate, but the leader of the opposition to reform.

“For months, UK Ministers have claimed that they are doing everything possible to address the deep crisis in our steel industry. This submission to the committee working on the reform of trade dumping measures shows that these have been crocodile tears.

“The UK government rather than supporting much needed action has been delaying and blocking it. They have corralled other member states to build a blocking minority which has left our steel industry and the tens of thousands of steelworkers and their communities virtually defenceless in the face of aggressive steel dumping from China, Russia and other global producers.

“As national steel ministers return to the EU negotiating table on Monday, they should know that MEPs and steel communities will not accept any more excuses.”

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