EC reforms trade policy, awaits Brexit outcome on LD rule

Aleksandra Kozlowska, a policy officer for steel at the European Commission

Scrapping the lesser duty rule (LDR) in the European Union’s steel trade defense mechanism remains a bone of contention between EU member states, Aleksandra Kozlowska, a policy officer for steel at the European Commission said during a Central European steel meeting held by EUROMETAL in Warsaw on Wednesday.

“There is a group of blocking minority member states for whom free trade is more important that creating a level playing field for the manufacturers in steel industry,” Kozlowska noted. This group has for many years been led by the United Kingdom. “Let’s see what happens after Brexit. It is a big question for us in which direction this trade defense instrument will go,” she added.

In spite of the LDR stalemate the EC has managed to push through some changes in the EU’s policy towards the steel industry, Kozlowska claimed. “For those of you who will go and read the Commission’s communication four years ago you will see a shift. In 2013 the focus was on climate policy, on energy prices, last year it is definitely trade,” she said.

Kozlowska noted that the EU authorities started to use a threat of injury as a sufficient basis for opening a trade investigation, a provision that already existed in the EU legislation but was “for many many years inactive.” Citing last year’s probe into the imports of HRC from China, she pointed out that EU producers were not able to demonstrate material injury, but the arguments for the threat of injury “were so solid that we decided to open an investigation. We’re waiting for definitive duties against China.”

She also highlighted the new method adopted by the EU to calculate dumping. Contrary to the old system, dumping from a non-market economy will no longer be benchmarked against the costs of an analogous non-market economy. “Now we will be able to take the distorted costs of raw materials and calculate ourselves what should be the undistorted cost. So we abolish the lists of market and non-market economies,” the EC official explained.

On much criticized lengthy EU procedures in comparison with the US, Kozlowska said that the EU system involves certain steps that cannot be skipped, for example consultations with member states. “We can cut one or two months but not more. We will never be able to respond as fast as the USA,” she concluded.

Wojtek Laskowski, PLATTS