Will Europe be able to retain a strong industrial base or will hundreds of thousands of jobs be lost because of unfair practices and dumping measures? This question is suddenly at the centre of the debate within the EU, not least in connection with the planned market economy status for China. Why does the USA succeed in protecting their industry against unfair competition and why does the EU fail? To address these issues, the Brussels offices of AK and ÖGB this week, together with the Chambers of Labour from Saarland, Bremen and Luxembourg as well as the German Trade Union Confederation (DGB) and the German Metal Workers‘ Union (IG Metall) organised two workshops with experts and works councils as well as a high level evening event. Peter Scherrer, Deputy Secretary General, European Trade Union Confederation ETUC opened the debate referring to the fundamental significance, which a strong steel industry with secure jobs would also have for other sectors. During the course of the day, numerous trade unionists and works councils had already used the opportunity in the discussions with Commission representatives to urge for a sustainable strategy to promote strong industrial development.

Markus Wieser: “Fair competition without tricks and loopholes”

In his speech, the President of the Chamber of Labour and the ÖGB of Lower Austria Markus Wieser came straight to the point: “Europa has to effectively defend itself against dumping, as we need fair competition and don't want to be confronted with tricks or backdoor deals.” It was high time to put pressure on: “We need an industrial policy project, which lays down the framework conditions for a strong development of the industry based on secure jobs and collective agreements.” Wieser referred to the general economic recession, which had let to a structural oversupply and a weak demand. Over recent years for example, Lower Austria too had lost 7.5% of the jobs in the industry. It was high time for a change of direction. The significant number of attending works councils agreed with Markus Wieser: “Concerning the steel industry, we have to show what Europe is capable of and take it as an example to ensure that the same does not happen in respect of other industries.” Workers are not interested in the differences between Member States, Commission and EU Parliament; the only thing that matters was that the EU would take decisive action at last, in the same way as it has been done by other economic areas. Otherwise, the trust of the people in the EU would be diminished even further.

Isolde Ries: “We need fair conditions“

1st Vice President of the Landtag of Saarland and Rapporteur of the CoR report on the steel industry, Isolde Ries (SPD) argued along the same lines. In view of China’s possible market economy status, which would make any action of the EU against dumping with regard to Chinese steel exports enormously difficult, Ries demands precautionary measures by the EU, in case China would claim this market economy status. It was time for the EU to apply tariffs, which would take full effect because “Europe does not do enough for its industry” was her criticism. There was a reason for the subject to take centre stage at this particular time: “Because the steel workers went to the barricades, because they made their voices heard. We must make our voice heard”, was her urgent appeal. The steel industry was not dependent on aid: “The only thing we need is fair conditions.

Knut Giesler: “Fundamental danger for Europe“

“If we fail to act with regard to holding the development in the steel industry, there will be other industries going down the same dangerous route. This is a fundamental danger for Europe”, warned Knut Giesler, Regional Head of IG Metall in North Rhine-Westphalia, who pointed towards the danger of de-industrialisation. Because of the fall in prices, the steel sector was in deep red; 85,000 direct jobs in Germany were affected with 8-time this number indirectly involved. “The steel industry has done its homework” emphasised Giesler. In particular VOEST would demonstrate how much European steel companies had already specialised. However, in contrast to the USA, Europe would not succeed in effectively warding off unfair dumping competition. “Explain to a simple worker why the EU, unlike the USA, is unable to close the borders for unfair imports.” There must be no additional burdens for the steel industry with regard to the emissions trade, as there is a gigantic backlog of investments already.

EU Commission: “Member States are blocking”

In general, the EU Commission also acknowledges a strong steel industry in Europe, because “without the steel industry we would not come anywhere near to this value chain in Europe, emphasised Gwenole Cozigou, Directorate General for Enterprise and Industry, EU Commission. However, the Member States would block the proposal of the Commission. Therefore, the so-called "lesser duty rule", could not be suspended. This rule would frequently lead to protective tariffs being lower in the EU than in other countries and would not offset established dumping. However, such a rule, which disadvantages the national industry, is neither requested by the WTO, nor is it applied by any other industrial nation.

Joachim Schuster: “EU Commission has failed to act”

However, Joachim Schuster (S&D), Member of the Trade Committee of the EU Parliament, did not let the EU Commission of the hook so quickly. “With the regard to China’s market economy status, the Commission has failed to act for years”, criticised the MEP. The Commission would still put more emphasis on competition policy than on industrial policy; that was wrong. The WTO did not prescribe the “lesser duty rule”: “This is a self-inflicted pain.” “By focusing so much on competition, one waves good-bye to the industry in Europe. And the people will turn their back on Europe.”

Dramatic consequences because of dumping imports

This dramatic assessment was also confirmed by many comments from the public, among them many works councils: “The steel industry will not be the last victim. It is high time to take action. Council, Commission and EU Parliament had to take decisive measures regarding industrial policy development instead being in favour of automatically granting the market economy status to China.” The Commission will possibly present its relevant proposal before the summer recess. However, trade unions and Chambers of Labour will continue to make their voices heard.

USA succeeds where the EU fails

How dramatic and urgent the problem is, show the following figures: In 2015 alone, China has increased her steel exports into the EU by more than 50 percent. In contrast, because in the meantime the North American market is well safeguarded by trade protection measures, exports into the USA have fallen by more than a quarter in 2015. Therefore, in a first step the EU has imposed preliminary tariffs against China and Russia; however, only ranging between 14 and 16 percent. Even though dumping margins for Chinese imports of almost 60 percent could be established. Hence, it is high time to put an effective end to unfair behaviour and dumping strategies.