EU ‘not playing fair’ with new duties on Chinese steel
Commerce Ministry objects to Europeans defining China as non-market economy for dumping investigation
The Commerce Ministry has expressed concern and regret after the European Union set provisional import duties on two types of Chinese steel coming into the bloc, calling its investigation methods “unfair”.
The duties announced on Friday are the latest in a line of trade defences set up against Chinese steel imports over the past two years to counter what EU producers say is a flood of steel sold at a loss due to Chinese overcapacity.
Some 5,000 jobs have been axed in the British steel industry in the past year as it struggles to compete with cheap Chinese imports and high energy costs.
G20 governments recognised last month that steel overcapacity was a serious problem. China is the source of half of the world’s steel and the top steel consumer.
The substitute-country investigation method used by the EU, a practice typically reserved for non-market economies, was “unfair and unreasonable” and “seriously damaged the interests of Chinese enterprises”, the Commerce Ministry said on Saturday.
“Reckless trade protectionism and mistaken methods that limit fair market competition are not the proper ways to develop the European Union steel industry.”
Chinese steel products represented less than 5 per cent of the European market and did not present a serious threat to European industry, the ministry said. The root cause of Europe’s steel problems was not trade but weak economic growth, it said.
“China hopes the EU will strictly respect relevant World Trade Organisation rules and fully guarantee Chinese companies’ right to protest,” the ministry said.
The EU’s duties are set at between 13.2 and 22.6 per cent for hot-rolled flat iron and steel products and at between 65.1 and 73.7 per cent for heavy-plate steel.
As provisional duties, they are in place for up to six months, until the European Commission finishes its investigation. If upheld, they would typically be set for five years. The commission has committed to speeding up its trade defence actions under pressure from EU producers.
The EU is debating whether to grant China “market economy status”, given Beijing’s hand in guiding industry and markets. China says the status is its right come December, which marks 15 years since it joined the WTO.
The commission has said that China was not a market economy and that it would not recognise it as one, but would adopt a new method to set duties that would abide by WTO rules.