[All redactions are made under art. 4(1)(b)]
Ref. Ares(2016)5244995 - 13/09/2016
From:
Burgemeester Termont Daniel
Sent:
13 September 2016 17:04
To:
EICHHORN Nele (CAB-MALMSTROM)
Cc:
CEBALLOS BARON Miguel (CAB-MALMSTROM); MUNGENGOVA Jolana (CAB-
MALMSTROM);
(CAB-MALMSTROM)
Subject:
Steel sector
Dear madam
Thank you for your e-mail.
I know of the fact that the ArcelorMittal management got in touch with you already and informed you of
the fact that they are convinced that a follow-up of the effective reduction of Chinese excess capacity is
almost impossible as China doesn’t work in a transparent way. Moreover if China would reduce its steel
producing capacity by closing old facilities and in the meantime increase its capacity utilization of the
other steel plants, this measure wouldn’t be effective.
Regarding anti-dumping and market economy status, we remain extremely vigilant. We welcome the
resolution which was adopted by the European Parliament in May and which contains several arguments
in view of guaranteeing a level playing field. We hope that the proposal of the European Commission
will be fully in line with the European Parliament’s resolution.
Thank you very much for your management of this issue. Please pass on my greeting to the
Commissioner.
Daniel Termont
Burgemeester Gent
www.termont.be
+32
Van: xxxx.xxxxxxxx@xx.xxxxxx.xx [mailto:xxxx.xxxxxxxx@xx.xxxxxx.xx]
Verzonden: maandag 12 september 2016 18:26
Aan: Burgemeester Termont Daniel
CC: xxxxxx.xxxxxxxxxxxxxx@xx.xxxxxx.xx
; xxxxxx.xxxxxxxxxx@xx.xxxxxx.xx;
@ec.europa.eu
Onderwerp: RE: Steel sector
Dear Mr Termont,
Allow me to reply to the points you bring to attention with respect to the situation regarding the impact,
notably on Arcelor Mittal Ghent, of the excess capacity of steel in China.
The discussion in the Commission is not about whether or not China is a market economy country but
rather a discussion about the calculation methodology used in anti-dumping cases and the implications
of the expiry of certain provisions of Section 15 of China's Accession Protocol in December this year. The
Commission has conducted an in-depth 'Impact Assessment', one of the mechanisms which ensure that
the EU fulfils its commitment to better regulation when designing EU policies and laws so that they
achieve their objectives. ArcelorMittal has been very active in the respective consultation process and
their views have been taken into account in the decision making process. The Commission discussed the
subject on 20 July and decided to table a legal proposal before the end of this year. Once the
Commission makes such a legal proposal, it is sent to the Council of Ministers and the European
Parliament, for adoption.
The steel crisis has further highlighted the effect which China's interventionist policies are having in
contributing to overcapacities which, in turn, have led to a significant increase in dumped and subsidised
imports causing damage to EU industry. We expect China to make significant and verifiable net cuts in
industrial over-capacity based on a clear timeline of commitments and an independent monitoring
mechanism. To achieve this goal, the Commission keeps delivering on its action plan for addressing the
overcapacity issue in the steel sector, through bilateral and multilateral contacts with our partners.
Unfortunately, this phenomenon of steel overcapacity is not only confined to the steel sector or indeed
only to the EU. We have seen an unprecedented number of trade defence investigations being opened
to address these problems worldwide.
Trade defence instruments play an important role for the EU steel industry, in particular in light of the
massive overcapacities in countries such as China.
The Commission continues to be fully committed to ensuring that the trade defence instruments remain
effective and strong in order to tackle unfair trade practices in a way that allows our industry compete
on a level playing field. This was one of the key elements of the Commission's Communication on Steel
adopted in March 2016. One example is the 15 ongoing investigations on various steel products from
China, that in three cases have already given place to provisional anti-dumping measures. We therefore
continue our concrete action against unfair trading practices and increasingly within shorter timelines
than before.
Kind regards,
NELE EICHHORN
European Commission
Member of Cabinet of Cecilia Malmström
Commissioner for Trade
BERL 11/321
B-1049 Brussels/Belgium
+32 2 29 87311
xxxx.xxxxxxxx@xx.xxxxxx.xx
From: Burgemeester Termont Daniel
Sent: Wednesday, September 07, 2016 5:07 PM
To: MUNGENGOVA Jolana (CAB-MALMSTROM)
Cc: CEBALLOS BARON Miguel (CAB-MALMSTROM); EICHHORN Nele (CAB-MALMSTROM)
Subject: RE: Steel sector
Thank you very much.
Daniel Termont
Burgemeester Gent
www.termont.be
+32
Van: xxxxxx.xxxxxxxxxx@xx.xxxxxx.xx [mailto:xxxxxx.xxxxxxxxxx@xx.xxxxxx.xx]
Verzonden: woensdag 7 september 2016 17:06
Aan: Burgemeester Termont Daniel
CC: xxxxxx.xxxxxxxxxxxxxx@xx.xxxxxx.xx; xxxx.xxxxxxxx@xx.xxxxxx.xx
Onderwerp: RE: Steel sector
Dear Mr Termont,
Thank you very much for your email below, and your interest in the EU policy on steel. Please
rest assured that Commissioner Malmström is well aware of the complex situation this industrial
sector is currently faced with. My colleagues in copy, Mrs Nele Eichhorn, who is responsible for
EU trade defence instruments, and Mr Miguel Ceballos Barón, our Deputy Head of Cabinet, who
follows relations with China, will revert back to you with more information.
Thank you in advance for your kind comprehension.
Best regards,
Ms Jolana MUNGENGOVÁ Cabinet of Cecilia Malmström
Commissioner for Trade
European Commission Berlaymont (BERL), Office 11/289
Rue de la Loi 200 – 1049 Brussels, Belgium (EU)
E-mail:
xxxxxx.xxxxxxxxxx@xx.xxxxxx.xx
Office phone: +32 (0)2 29 57715
From: Burgemeester Termont Daniel
Sent: Wednesday, September 07, 2016 4:02 PM
To: MUNGENGOVA Jolana (CAB-MALMSTROM)
Subject: Steelsector
Dear madam Mungengova
First of all: thank you very much for the meeting with EU-commissioner Malmström on
Monday the 5th of September, 2016.
Due to the most interesting debate on TTIP, I lacked the time to inform the
commissioner of my concern regarding the possible recognition of China as a ‘market
economy’.
In the city of Ghent, an ArcelorMittal steel plant employs nearly 5,000 people. Indirect
employment linked to the ArcelorMittal plant adds up to some 15,000 people. Chinese
competition is very fierce, due to the dumping of Chinese steel surplus at prices far
below normal tariffs.
China produces 800 million tons of steel on a yearly basis, this is 50% of the world steel
production. Between 2008 and 2014, Chinese steel production rose by 320 million tons,
this figure is double the European steel production. There is an enormous overcapacity
of more than 500 million tons of steel worldwide, the major part of it in China.
As a consequence of the current economic slowdown in China, China exports steel at
dumping prices. China exported about 120 million tons of steel in 2015. Steel export
from China at unfair dumping prices has a very negative impact on the steel prices in
Europe. In order to gain market share in Europe, China pushed the selling price of its hot
rolled coils exported to Europe down by 42% (from 457 USD/ton in January to 262
USD/ton in December) in 2015. This price level is significantly below the cost price of the
most competitive steel companies in Europe. This threatens the sustainability of the
European steel industry.
Of course, we are in favour of free trade, but not at dumping conditions. ArcelorMittal
Gent and Liège continuously invest in environmentally friendly measures and in new
products, but this will only remain possible if these companies are profitable in a market
based on fair rules, which is not the case today.
European steel sector submitted last year 7 antidumping cases to fight against unfair
competition. We ask European Union to significantly accelerate the treatment of anti-
dumping cases.
Because China at present does not meet the conditions for obtaining the market
economy status, we urge the European Union not to grant this status to China. Could you please attract the commissioners attention to this issue, in order to take up
the defense of the European steel industry?
Thank you very much in advance.
Daniel Termont
Mayor of Ghent
Burgemeester Gent
www.termont.be
+32
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