UK Steel Industry — House of Commons, 2016-02-29
Topic: Foreign Trade
Tom Blenkinsop (Labour, Centre-left): There are a lot of issues that we could talk about today, including the Government’s unilateral introduction of the carbon price floor tax on energy intensive industries, but I will not go into that now. I have beaten that drum many times in this House. We could also talk about procurement contracts or business rates, but the two elements that I want to focus on are the lesser duty rule and Chinese market economy status. Those two issues are of primary concern to the UK steel industry Today at the Competitiveness Council in Brussels, industry Ministers from across the EU are discussing actions actively to support the European steel industry, to enable the sector to compete on a fair and level playing field within the global market. This meeting follows the extraordinary Council meeting on steel that was held on 9 November last year and the High Level Conference on 15 February this year. Today’s meeting is the last-chance saloon for this Government and our steel industry. Only last week, for example, the chief executive of Tata Europe, Karl Ulrich Köhler, quit the company. We have to bear that in mind and try to determine what it says about Tata’s future in the UK. The tsunami of underpriced, unfairly traded steel, most notably from China, is destroying the steelmaking capacity of the UK and the EU This brings me to the primary point at issue. In order to retain virgin steel production in blast furnaces in the UK, we must deal with two immediate threats if our nation’s steel industry is even to stand still. Those threats are the lesser duty rule and Chinese market economy status. Europe currently uses the lesser duty rule to impose the lowest possible duties on unfairly traded products that have been dumped in European markets. That means that duties introduced by Europe are usually way below the actual margin of dumping. The result is that the dumping continues and unfairly traded products are allowed to compete in European markets and depress prices The United States does not follow the lesser duty rule, which means that it can implement much tougher sanctions that reflect the actual margin of dumping. For example, the US recently imposed duties of 236% on a particular grade of Chinese steel. Furthermore, the US Government are in the process of introducing new laws that will enable the US to take even tougher action against Chinese dumping. The consequence for Europe, and for the UK in particular, if we do not take action as a European Union and if the Government actively prevent the EU from improving our standing, will be to exacerbate the amount of Chinese dumping in our domestic market and in our own EU market. It will actually affect our own exports, never mind our ability to look after ourselves The director-general of Eurofer, Axel Eggert, has stated: "By blocking the lifting of the lesser duty rule, these member states deliberately deprive the European steel sector of the chance to receive effective and legitimate remedy against massive dumping. It is member states with steel production and jobs that continue blocking an agreement within the EU Council to remove this outdated rule." He goes on to state: "It is most notably the UK".