Steel industry 'won't survive' if China gets trading status

Europe's steel industry "will not survive" if the European Union grants China a special international trading status, an industry body warned.

The European Steel Association urged the EU to dismiss the idea, saying the country would flood the market.

Ahead of the EU membership referendum, leave campaigners said this strengthened their case.

But remain vote supporters said there was a better chance of protecting the industry at an EU level than a UK one.

'Not met criteria'

The association is concerned, if China is recognised as a market economy, its products, including steel, will have easier access to the EU single market.

But Remain supporters said China had not met the criteria to become a market economy, and this status would not be granted.

Thousands of Welsh steel jobs are at risk following Tata Steel's decision in March to sell its UK operations - including 4,100 at its Port Talbot site.

One of the problems facing the industry has been China's ability to sell steel in Europe below the cost of production, as it attempts to get rid of an excess.

Because its government has been seen to interfere in the market, deflating prices to achieve this, the European Commission considers it a non-market economy.

This means it has been able to impose taxes on some of its products coming into Europe.

But the commission is considering changing China's status to that of a market economy, with concerns this could mean its exports would face lower tariffs as a consequence.

"I think we will not survive," said Karl Tachelet of the European Steel Association, when asked by the BBC's Sunday Politics Wales programme about the impact.

"The excess capacity of China is estimated at 350 to 400 million tonnes.

"The total steel demand in Europe, which is by far the second biggest steel market in the world, is around 170m tonnes."

But Welsh Labour MEP Derek Vaughan said China did not meet the proper criteria to gain that status - so the concerns were unfounded.

"Currently the European Parliament's position is that we would not accept market economy status for China," he said.

"There are many people including myself who feel China have not met the five criteria they need to meet and therefore they won't get granted market economy status at the end of the year."

'Dumping'

The commission must issue a proposal on China's trading status by the end of 2016, which will then need to be rubber-stamped by the European Parliament and EU member states.

Campaigners for the UK to leave the EU say the issue is reason enough to get out.

Gisela Stuart MP, chairwoman of the official Vote Leave campaign, visiting Cardiff, said: "I think it's very, very serious concerns.

"But it also shows that the European Commission, which has been investigating Chinese steel dumping for the last 10 years without taking any action, is clearly not acting in our best interest."

But Mr Vaughan said: "We want to speed up the time it takes to impose anti-dumping tariffs on Chinese steel and the amount of tariffs that can be imposed on Chinese steel.

"But unfortunately on each occasion we have tried to do that it's been the UK government and others who have blocked it.

"I think we have got a much better chance of protecting the steel industry at a European level than at a UK level."