UK steel crisis

News | World

celOn Thursday (31 March), the European Steel Association, a Brussels-based lobby group, called on the European Union to raise anti-dumping tariffs to make Chinese imports less competitive. That same day, a British Eurosceptic member of the European Parliament Nigel Farage said that only if Britain votes to leave the EU in a referendum later this spring can the UK’s steel industry and the around 20,000 jobs it supports be saved.

With less than three months to go to the 23 June in/out referendum, all political debate in the UK quickly develops a European angle. The decision is linked to cheap Chinese imports and global over production, which are causing heavy losses. Some estimates say the Tata plant at Port Talbot is losing around £1 million per day. Business Insider UK finance editor Lianna Brinded, who called steel prices in Europe “ridiculously low”, summarized Britain’s steel problem in three short sentences: “Our steel is too expensive. There is too much of it. And no one wants to buy it.”

To those campaigning for the UK to leave, the answer is clear. “If we vote to remain on June 23 it is the end of the steel industry in this country. Simple as that,” Farage said. A 2013 EU commission proposal would have scrapped the self-restraining “lesser duty” rule, which affects the way anti-dumping tariffs are calculated. But the UK has been one of the EU member states blocking the lifting of that rule, effectively holding off the option to increase tariffs, British media reported.

“The UK is the ringleader in a blocking minority of member states that is preventing a European Commission proposal on the modernization of Europe’s trade defense instruments,” the head of the European Steel Association Axel Eggert told the Financial Times. A spokesman for another steel lobby group, Eurofer, told Huffington Post UK scrapping the rule would make “a huge difference”. “We can’t really understand why they can’t do whatever it takes to fix the system. They had the opportunity,” he said about the UK government. For his part, UK prime minister David Cameron has promised the government is doing everything it can, but also noted that he does not think nationalization “is the right answer”.

“We’re going to work very hard with the company to do everything we can, but it is a difficult situation, there can be no guarantees of success because of the problems that the steel industry faces worldwide,” he said on Thursday.

Source://euobserver.com/economic/132869