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October 10, 2016

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EU duties on Chinese steel ‘unfair’

CHINA has expressed concern and regret after the European Union set provisional import duties on two types of Chinese steel shipped to the bloc, calling the EU’s investigation methods “unfair.”

The duties announced on Friday are the latest in a line of trade defenses set up against Chinese steel imports over the past two years to counter what EU steel producers say is a flood of steel sold at a loss due to Chinese overcapacity.

Some 5,000 jobs have been axed in the British steel industry in the past year as it struggles to compete with cheap Chinese imports and high energy costs.

The governments of the G20 group recognized last month that steel overcapacity was a serious problem. China, the source of 50 percent of the world’s steel and the largest steel consumer, has said the problem is a global one.

The substitute country investigation method used by the EU, a practice typically reserved for countries deemed non-market economies, are “unfair and unreasonable” and “seriously damage the interests of Chinese enterprises,” the Ministry of Commerce said in a statement posted to its website late on Saturday.

“Reckless trade protectionism and mistaken methods that limit fair market competition are not the proper ways to develop the European Union steel industry,” it said.

Chinese steel products represent under 5 percent of the European market and are not a serious threat to European industry, the ministry said. The root cause of Europe’s steel problems was not trade but weak economic growth, it said.

“China hopes the EU will strictly respect relevant World Trade Organization rules and fully guarantee Chinese companies’ right to protest,” the ministry said.

The EU’s duties are set at between 13.2 and 22.6 percent for hot-rolled flat iron and steel products and at between 65.1 and 73.7 percent for heavy-plate steel.

As provisional duties they are in place for up to six months until the European Commission completes its investigation. If upheld, they would typically be set for five years.

The commission has committed to speed up its trade defense actions under pressure from EU producers.

The EU has also been debating whether to grant China “market economy status,” given the Chinese government's hand in guiding industry and markets. China says the status is its right come December, which marks 15 years since it joined the WTO. Failure to do so could spark a trade war.


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