June 23, the EU has decided to levy 24% anti-dumping tariffs on wire rod imported from China since August this year. The tariffs will be valid for five years and the relevant amount of money may reach 600 million euro.
China’s Ministry of Commerce claimed that this measure by the EU is inappropriate and unnecessary.
Building trade barriers is a critical blow to steel-consuming industries.
Experts point out that protectionism is a double-edged sword. European corporations are in the process of globalization and their interests are no longer constricted to EU countries. Ex EU trade commissioner Mandelson points out that in order to keep themselves competitive, more and more European corporations outsource production to countries with cheap labor like China and it is becoming difficult to define the notion of European corporations. The EU needs to reconsider how to employ anti-dumping measures to benefit European corporations and consumers. Steel-consuming industries, like the construction industry and equipment-manufacturing industry, used to warn against protectionism in favor of steel corporations. They claimed that it would be a critical blow to European steel-consuming industries if the EU gave in to pressure from steel corporations and set trade barriers against Chinese steel. Secretary Orgalime Adrian Harris used to say that relatively cheap Chinese steel provided strong support for European corporations to keep themselves competitive.
Analysts point out European steel corporations only have about 300 thousand employees while the metal processing industry and equipment manufacturing industry have over 7 million employees. The EU should make a wise decision from the perspective of guaranteeing employment,
Song Hong, researcher for the Institute of World Economics and Politics of Chinese Academy of Social Sciences, told a reporter that the two G20 summits both put emphasis on keeping the openness of trade and investment. They were also against protectionism and promised not to set any new investment or trade barriers. The action of the EU is an obvious inharmonious signal at a time where emphasizing on increasing global corporation to fight again economic crisis is important.
Anti-dumping policies are heavily biased toward trade protectionism
Since the burst of global economic crisis, international steel trade has been shrinking and so has the demand for steel. It is known that application for steel product import in the 27 countries of the EU decreased to 1.185 million tons in April, a decrease of 22% from March and a decrease of 56% from previous year. Application for hot rolled coil import was 215 thousand tons in April, a decrease of 46% from March and a decrease of 54% from previous year. Application for cold rolled coil import was 102 thousand tons. In addition, application for steel plate import is 98 thousand tons, a decrease of 60.8% from previous year and a decrease of 11% from March.
Song Hong said the Chinese steel industry has been heavily hit by the global economic crisis. Overseas demand has decreased substantially and so has export to Europe. Under such circumstances, Chinese steel export will be pushed into an even worse situation if the EU determines to levy heavy anti-dumping tariffs on Chinese steel products.
Anti-dumping policies by the EU have always incurred criticism both domestically and overseas. Those policies are criticized as being heavily biased toward trade protectionism. However, such narrow minded policies can no longer protect the overall interests of the EU in the era of economic globalization. It may even hurt both sides. In recent years, anti-dumping policies against China have always brought about disputes inside the EU. Wire rod is mainly used in the construction industry. Steel-consuming industries have always opposed anti-dumping investigations against Chinese steel. They think this will influence steel supply in European markets thus hurt steel consumers.
China proposes to keep open international trade.
The EU is most famous for the use of anti-dumping policies and China is it's a main target. Last March, the European Confederation of Iron and Steel Industries (Eurofer) filed anti-dumping charge against Chinese wire rod and the EU committee officially started anti-dumping investigations of Chinese, Turkish and Moldovan wire rods since May 8, 2008. This is one of anti-dumping investigations against Chinese steel products by the EU.
Eurofer has been leading to file several anti-dumping charges against Chinese steel products, like galvanized sheet, cold rolled stainless steel sheet, organic coated steel sheet, stainless steel wire, bright stainless steel bar and wire rod. The tendency toward protectionism is becoming more obvious. Because of interference by the Chinese government and protest from relevant corporations, the EU did not implement anti-dumping policies against galvanized sheet and cold rolled stainless steel sheet.
Song Hong thinks that protectionism is becoming more severe in the midst of global economic crisis and recession and the number of policies against China is increasing. As a result, relevant Chinese authorities have taken active measures to deal with this. This is a good representation of China's image as a responsible big country. China proposes to maintain an open international trade environment and fights back against irresponsible behaviors in the field of international trade to protect the rights of just Chinese corporations.
By People's Daily Online
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