EU To Start Surveying Steel Imports To Support Industry

3 May 2016

The European Union said Friday it would start surveying steel imports as part of the bloc’s effort to support its struggling steel sector as it grapples with global overcapacity.

The European Commission, the EU’s executive arm, is establishing a mechanism for monitoring steel imports to the 28-counrty bloc aimed at obtaining better information of imports of steel to the region and deterring partners against unfair trade practices.

“This decision also gives a clear signal to companies, including in exporting countries, that the Commission actively monitors market developments and is willing to take the necessary steps if justified,” the commission said.

Under the new surveillance system, which will be applied to certain steel products, imports will be subject to prior monitoring so that authorities can get more data on import trends and address any unfair trade practices. To do this, all imports of steel products in the EU will require an import license, which will include the necessary information.

“It is an important signal that Europe is paying attention,” said Charles de Lusignan, communications manager at European steel association Eurofer.

Given recent trends in steel imports, the vulnerable situation of the European steel industry and the likelihood that excess capacity would be redirected to the EU if demand picks up, “a threat of injury to [EU] producers is therefore deemed to exist,” the commission said in its official journal.

The new surveillance system will start operating in 21 days and will be in place for four years. It will apply to imports whose net weight exceeds 2,500 kilograms, while imports from Norway, Iceland and Liechtenstein will be exempted.

The system is part of a set of plans presented by the commission last month to support the EU’s steel sector, after warnings by industries and governments that unfair trade practices by global competitors such as China could push the sector to the brink of collapse.

The plans include speeding up the adoption of tariffs on imports that are “dumped” at below-market prices and scrapping rules that limit the level of duties the EU can apply to steel imports.

Ministers from several EU governments, including France, Germany and the U.K., urged the bloc in February to step up its action amid widespread job losses in the sector.

The steel industry represents 1.3% of EU gross domestic product and provided around 328,000 jobs in 2015, according to the commission.

In recent months, the bloc has taken measures to protect steelmakers from unfair trade, opening several investigations into allegations of unfair trade practices by Chinese manufacturers and slapping tariffs different types of steel imports from China.

Steel imports from China, the world’s largest steel producer, to the EU have more than doubled over the past two years, while the bloc’s demand languishes below levels seen before the 2008 financial crisis. EU steel prices have dropped roughly 40% over the past two years.

The continuing crisis in the steel industry has further complicated a debate over whether the EU should formally designate China as a market economy by the end of this year, a move that will fundamentally change its relationship with its second-largest trading partner. If the EU recognizes China as a market economy, it would make it more difficult for Europe to impose tariffs on Chinese goods.

But European industries say Beijing uses government subsidies to boost exports and undercut overseas competition. They say China’s economy is still controlled by the state and governments must take that into consideration when weighing up whether or not to award it market status.


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