EU steelmakers say UK helped cheap China imports

Tata Steel signalled its exit from Britain on March 30, blaming global oversupply of steel, cheap imports into Europe, high costs and currency volatility (AFP Photo/Geoff Caddick) (AFP)

Brussels (AFP) - Britain has prevented stronger EU proposals to bolster defences against cheap Chinese steel imports, which helped spark the Tata Steel crisis, the European Steel Association said on Friday.

The decision by Indian giant Tata to put its business at the Port Talbot steel plant in south Wales up for sale has forced Prime Minister David Cameron to hold crisis talks at the prospect of losing up to 15,000 jobs.

"Britain opposed the end of the lesser duty rule," Charles de Lusignan, a spokesman for Brussels-based Eurofer, told AFP, referring to an EU plan to ignore a key regulation when setting anti-dumping tariffs.

"They thought that if they blocked the changing and the modernisation of the trade defence instruments, that would give them favours with China," he added.

Eurofer boss Axel Eggert, whose organisation represents Europe's steelmakers, was quoted as telling the Financial Times on Friday that London "is the ringleader in a blocking minority of member states that is preventing a European Commission proposal on the modernisation of Europe's trade defence instruments."

Britain in February signed a statement with six other European Union states urging Brussels to take action against "dumping" of steel at low prices.

But Eurofer said that statements by British business minister Sajid Javid showed that London was in fact opposed to getting rid of the lesser duty rule.

"Britain is generally seen as being in favour of market economy status for China, and they are seeking investment from the Chinese," said de Lusignan, referring to a designation that would lift bans on certain Chinese exports and investments.

"As most dumping cases involve Chinese cases, that makes a direct link between changes to the anti-dumping system and relations with China."

Compared to the United States, EU import tariffs on Chinese steel imports are low -- there is duty of 16 percent on Chinese cold-rolled steel compared to a 236 percent tariff in the US.

Cameron is now battling to avoid the Tata situation giving fuel to campaigners who want Britain to leave the European Union in a tight referendum on June 23.

Fitch Ratings on March 24 said that the European Commission's proposal to ditch the lesser duty rule "could materially reduce Chinese steel exports to the region".