As the UK prepares to leave the European Union, new laws governing customs and trade will be created. These laws will have a big impact on the UK’s ability to stop the dumping of unfairly traded steel, but as things stand they risk doing more harm than good. Today, Community’s steel and wire sector committee wrote to the Chancellor, the government minster responsible for the bill, outlining their concerns and calling on him to take meaningful action. Read the full text of the letter below, and download a copy here.
Steel and Wire Sector Committee
Rt Hon Philip Hammond MP
Chancellor of the Exchequer
1 Horse Guards Road
8th January 2018
Dear Mr Hammond,
We are steelworkers from Port Talbot, Scunthorpe, Corby, Shotton, Sheffield, Rotherham and Teesside, and we represent Community members in steel businesses like Tata Steel, British Steel, Liberty Steel, Celsa, Sheffield Forgemasters, Vallourec and Outokumpu.
We are writing because MPs will be debating what is known as the Customs Bill today. We know that it’s the kind of bill that won’t draw much public attention – dry, technical, complex. But we are seriously concerned at the effect the Bill might have on our industry and our communities.
When the UK leaves the European Union we will of course need to set up our own way of preventing unfair trade or dumping of goods. We understand this Customs Bill is putting down the framework for that to happen. But as it is currently written, we fear it will not be effective.
It is our members’ livelihoods that will be threatened if this piece of legislation does not serve to protect our industry from the ongoing and existential threat that is the dumping of unfairly priced and state-subsidised steel into our markets.
How do we know this? Because we have lived through the terrible impact when there is no decisive response to unfair trading practices. Steel dumping, particularly from China, was a significant factor in the steel crisis we faced over the past few years. We know Chinese steel companies benefit from state subsidies and other support. To give an example between 2011 and 2014 the Chinese share of the UK’s rebar market rose from 0% to 45% and consequently the price dropped by more than a third; how can we compete with that? Dumping from China has subsided, for now, owing to the long-overdue introduction of a range of EU trade remedies on Chinese steel. But where we have seen China withdraw from the market others, like Turkey or Iran, have stepped forward to take their place.
Since 2015 there have been thousands of steel jobs lost across the UK. Our union, Community, has been at the forefront of the campaign to Save our Steel and ensure a sustainable future for what is left of the industry. That’s why we are raising our collective voices again today.
Because steel jobs are high quality jobs with good terms and conditions, each of which supports a further three jobs in the wider economy. History shows us that once lost these jobs are not replaced by comparable work, and for those who lose their job and are fortunate enough to find new employment it tends to be low paid or insecure or both.
The UK needs a fully-formed fast-acting and tough trade defence system ready for when we leave the EU and the customs union. But the government’s track record on backing robust trade defence and the direction of travel set out in the Customs Bill gives us serious cause for concern. The UK cannot be seen as a soft touch when it comes to dumping. We know that competitors in the EU and the US will continue to take robust action against dumping. The UK must prove it is ready to do the same.
This means that the UK must not embark on a dangerous experiment by becoming only the second country to adopt both a ‘lesser duty rule’ and ‘economic interest test’ approach to trade defence.
We stress that we absolutely believe in free and fair trade – of course we do, we export more than half the steel we produce. It’s precisely because we believe in fair trade that it’s so important we get this right and deliver an effective trade defence system that enables our industries to prosper and grow. We’ve never asked for protectionism or government handouts, all we ask for is the opportunity to compete in this global marketplace on a level playing field.
We must give ourselves every available tool to protect ourselves from unfair trade, or else we will have no industry left. And when that happens you can bet your last ingot that Chinese rebar won’t come so cheap anymore.
Mark Davies (Chair)