Steel firms set to demand action over ‘illegal’ imports

Date: 02/07/1998

By Peter Chapman

EU STEEL firms are calling on the European Commission to keep a watchful eye out for dumping and illegal subsidies as the volume of cheap imports from outside the Union soars.

Steel industry lobby Eurofer says it is poised to launch complaints with the Commission over illegal imports from central and eastern Europe and Asia as exporters and their governments offload surplus products which can no longer be sold in the Far East because of the region's economic crisis.

"We are gathering all the information we can with a view to filing trade complaints immediately," said Eurofer spokesman Gordon Moffat.

Turkish and central eastern European firms are set to face calls for anti-dumping duties, while complaints against east Asian companies are likely to demand 'countervailing measures' to offset illegal state subsidies.

Moffat says this is because the massive depreciation of local currencies in Asia will make it difficult for the Commission to justify anti-dumping duties based on analysis of pricing data.

"Countries such as Turkey and central and eastern Europe normally export most of their output to Asia. But since the Asian market has dried up, so we are seeing a reversal of trade flows," he said.

Moffat points to import statistics for January to March which show a 40% increase in steel shipments from outside the EU compared with the same period last year.

Buried inside this 40% rise are huge increases in imports from Asia (up 334%), eastern European countries (up 37%), former Yugoslavia (up 40%) and Turkey (up 30%).

Eurofer says these imports are wreaking havoc in markets where they are concentrated, particularly Italy, and its members are facing the greatest problems in the flat rolled steel sector.

The European Independent Steelworks Association (EISA), whose members specialise in 'light long products', high alloy steels and cold and hot rolled coils, also reports similar setbacks because of increased imports from Romania and Turkey.

EISA director-general Maria Alois wants the Commission to target unfair trade practices and "quickly take the necessary action" before the industry faces a massive downturn.

"We intend to defend our market. We think that free trade cannot be separated from fair trade. That is why we are focusing on subsidies which some governments are still granting to their steel producers," she said. "We are asking the Commission to monitor the situation as well as it can. We are just at the beginning of the situation. Things can only get worse."

Any decision to impose duties on East European imports would be politically explosive. The steel industry in the biggest producer Poland is already facing massive restructuring due to EU pressure.