Resolution of the ECSC Consultative Committee on steel imports into the European Union and the threat to the European Union steel market of trade actions in the United States of America
Date: 1998-10-23
Institutions: Consultative Committee of the European Coal and Steel Community
Subjects: import (EU), import policy, iron and steel product, steel, third country, trade policy

C  371/14

EN

Official  Journal  of  the  European  Communities

1.12.98

RESOLUTION  OF  THE  ECSC  CONSULTATIVE  COMMITTEE  ON  STEEL  IMPORTS  INTO  THE
EUROPEAN  UNION  AND  THE  THREAT  TO  THE  EUROPEAN  UNION  STEEL  MARKET  OF
TRADE  ACTIONS  IN  THE  UNITED  STATES  OF  AMERICA

(98/C  371/06)

(adopted  unanimously  during  the  342nd  session  of  23  October  1998)

THE  ECSC  CONSULTATIVE  COMMITTEE,

-(cid:217)referring  to  its  previous  resolutions  devoted  totally  or
partially  to  problems  concerning  EU  imports,  and
most  recently  to  that  dated  14  March  1996(cid:216)(˛),

-(cid:217)referring  to  the  forward  programme  for  steel  for  the
second  half  of  1998  and  for  1998  as  a  whole(cid:216)(ˇ)
presented  by 
in  which  clear
reference  is  made  to  the  evolution  of  imports,

the  Commission 

NOTING  THAT:

-(cid:217)the  present  situation  of  the  world  steel  market  is
critical.  The  crisis  which  began  in  SE  Asia  has  global
effects.  It  has  affected  all  countries  that  produce  and
trade  in  steel.  The  collapse  of  the  economies  of  the
far  east  brought  with  it  a  collapse  of  steel  demand
there  and  led  to  sudden  changes  in  the  pattern  of
trade,

-(cid:217)the  European  Union  has  so  far  absorbed  a  very
significant  share  of  the  shifts  in  trade  balance  arising
from 
the  overwhelming
burden  of  it.  No  other  market  including  the  US  has
seen  such  an  increase  in  imports  in  either  absolute  or
in  percentage  terms,

this  crisis  and  assumed 

-(cid:217)imports  of  steel  products  into  the  EU,  following  a
significant  increase  in  1997  of  17(cid:216)%,  have  rapidly
accelerated  in  the  first  six  months  of  1998,  showing
an  overall  increase  of  over  70(cid:216)%.  For  certain  flat
products,  the  percentage  increases  are  even  higher,

the 

initial  brunt  of 

-(cid:217)while  in  tonnage  terms  Italy,  Spain  and  Germany
have  borne 
imports,  other
countries  are  now  experiencing  significant  increases:
Luxembourg
Belgium 
France  +(cid:216)265(cid:216)%, 
+(cid:216)264(cid:216)%, 
the  Netherlands  +(cid:216)146(cid:216)%,  Austria
+(cid:216)74(cid:216)%,

and 

(˛)(cid:217)OJ  C  138,  9.5.1996.
(ˇ)(cid:217)OJ  C  233,  25.7.1998.

-(cid:217)the  development  of  imports  is  a  direct  consequence
of  the  crisis  in  the  Asian  economies  and  the  collapse
of  steel  demand  there.  Imports  direct  from  that
region  are  rising  rapidly,  moving  from  38(cid:216)kt/month
in  1997  to  299(cid:216)kt/month  so  far  in  1998,  an  increase
of  685(cid:216)%.  Imports  from  Asia  now  represent  21(cid:216)%  of
all  imports  of  finished  ECSC  products,  up  from  only
4(cid:216)%  in  the  same  period  of  last  year,

-(cid:217)even  more 

is 

terms 

tonnage 

important 

the
in 
distortion  in  trade  flows  in  steel  which  the  crisis  in
the  Far  East  has  provoked.  There  are  now  massive
influxes  on  to  the  European  market  of  material  which
would  normally  have  been  exported  to  the  markets  of
the  Far  East.  In  that  respect,  tonnages  from  the
largest
Central  and  East  European  countries,  the 
exporters  to  the  European  Union  of  ECSC  products,
have  risen  by  32(cid:216)%,  those  of  Serbia/Montenegro  by
88(cid:216)%  and  of  Turkey  by  105(cid:216)%,

-(cid:217)all  the  evidence  points  to  a  continuation,  and  even  an
acceleration,  of  this  trend.  Import  licence  information
available  up  to  August  shows  increases  in  licence
applications 
the
economic  weakness  has  spread  to  other  regions,
notably  Russia  and  South  America,

finished  products  of  60(cid:216)%; 

for 

-(cid:217)owing  to  the  same  factors  that  are  driving  imports
into  Europe,  export  opportunities  are  falling.  Exports
by  European  producers  have  fallen  by  17(cid:216)%  in  the
first  six  months  of  this  year.  Exports  to  Asia,  which
in  the  past  represented  about  30(cid:216)%  of  exports  by
European  producers,  have  fallen  by  56(cid:216)%.  Exports  to
the  USA  have  fallen  by  12(cid:216)%,

-(cid:217)as  a  consequence,  for  the  first  time  in  the  history  of
the  ECSC,  the  European  Union  has  become  a  net
importer  of  steel.  Should  the  increase  in  imports  and
the  decrease  in  exports  maintain  the  same  rhythm  for
the  whole  of  1998,  the  European  steel  industry  will
be  faced  with  a  negative  balance  of  nearly  4  million
tonnes,  which  represents  a  loss  of  tonnage  for  the
industry  compared  with  last  year’s  positive  balance  of
some  13  to  14  million  tonnes,

1.12.98

EN

Official  Journal  of  the  European  Communities

C  371/15

-(cid:217)the  damage 

the  European 
to 
exacerbated  by 
the 
countries  which  are  delivering  at  price 
below  the  market  price  in  the  EU,

is
trade  practices  of  certain
levels  far

steel  market 

-(cid:217)such  trade  practices  are  often  the  result  of  subsidies
or  dumping  on  the  part  of  the  producers  concerned,

-(cid:217)a  proliferation  of  dumping  actions  worldwide
concerning  steel  products  is  increasing  the  risk  of
diversion  of  tonnage  to  open  markets  such  as  the  EU,

-(cid:217)in  this  respect,  the  intention  of  the  US  steel  industry
to  seek  remedy  through  the  preparation  of  massive
trade  cases  and/or  safeguard  measures  represents  a
real  threat  to  the  EU  market.  The  closure  of  the  US
market  could  create  an  unsustainable  situation  for  the
European  market,  either  through  the  inclusion  of  EU
countries  in  US  trade  cases  or  by  the  diversion  of
tonnage  to  the  EU  market  by  countries  implicated  in
such  cases,

-(cid:217)the  impact  in  terms  of  employment  of  the  loss  of
turnover  now  being  experienced  by  the  steel  industry
in  Europe  will  be  grave,

REQUESTS  THE  EUROPEAN  COMMISSION,
THEREFORE:

-(cid:217)to  monitor  closely  the  development  of  imports,  both
as  regards  quantities  and  prices  and  their  impact  on
the  situation  of  EU  producers,

-(cid:217)to  consider  an  overall  response  to  the  situation  and
report  on  a  comprehensive  plan  to  respond  to  the
import  crisis  before  it  spreads  to  other  sectors,

-(cid:217)to  intervene  with  third  countries,  using  the  approach
most  appropriate 
their
membership  or  not  of  the  WTO  and  the  nature  of
their
their  relationship  with 
attention  to  the  concerns  of  the  EU  steel  industry
and  explore  possible  solutions,

to  each  according 

to  draw 

the  EU, 

to 

-(cid:217)to  assure  the  full  and  effective  enforcement  of  the
trade  policy 
instruments  to  defend  the  EU  steel
industry  and  its  workers  from  unfair  trade  practices,
including  the  possibility,  foreseen  in  the  legislation,
of  introducing  complaints  based  on  threat  of  injury,

-(cid:217)given  the  continued  delay  in  the  provision  of  trade
data  by  Member  States,  to  continue  meanwhile  the
system  of  prior  surveillance  and  of  double  control,

they  have  a 

-(cid:217)given  that  European  producers  have  clearly  not
contributed  to  the  present  critical  situation  on  the  US
market,  on  which 
long(cid:220)established
presence,  since  EU  exports  to  the  US  have  decreased
rather  than 
increased  this  year,  to  urge  the  US
administration  at  the  highest  political  level  that  any
actions  taken  to  deal  with  the  US  trade  problems  are
appropriate,  measured  and 
the
sources  of  these  problems,

target  genuinely 

-(cid:217)recognising  that  the  present  crisis  in  the  steel  market
is  a  global  problem,  calls  for  the  end  of  the  present
destructive  price  deterioration;  a  measured  and
responsible  reply  by  importing  countries;  the  exam(cid:220)
ination,  together  with  the  US  administration,  of  an
appropriate  action  to  avoid  a  complete  closure  of
markets  as  a  response  to  the  immediate  crises  caused
by  the  distortion  of  trade  flows  in  steel  products
which  would  simply  exacerbate  the  present  problems
being  experienced  on  steel  markets,

-(cid:217)to  affirm 

that  retention  of  an 

indigenous  steel
industry  is  essential  to  the  long(cid:220)term  viability  of  the
EU  as  a  manufacturing  base;  that  if  the  US  market
were  to  close  the  inevitable  result  would  be  that  the
EU  steel  industry  and  its  workforce  would  alone  pay
for 
the  global
economic  and  financial  instability;  and  that  in  such
circumstances  the  Commission  would  take  additional
steps  to  safeguard  the  future  of  the  EU  steel  industry.

the  effects  on  steel  markets  of