Strasbourg, 14 March 2018
Vice-President Katainen's opening remarks:
Ladies and Gentlemen,
We have taken note of the decision of the US President last week to
impose tariffs on imports of steel and aluminium to the US. We have also
taken note of the possibility for allies to be excluded from the scope
of such measures. We expect that the EU as a whole will be excluded as a
key political, security and economic partner that trades fairly with
the US.
EU and the US are strong historic allies. We share and promote
fundamental values such as democracy, the rule of law, human rights. We
also believe in and stand for undistorted market economy as well as
open, rule-based and fair trade.
In the past years, both the US and the EU have faced increased
imports and dumping of steel and aluminium, mostly from Asia. To a large
extent, this has been the consequence of global overcapacity, in
particular in China, fuelled by massive domestic subsidies. As a
response, both the EU and the US have taken action against this in the
form of anti-dumping measures on Chinese steel and aluminium imports –
which are allowed by the WTO. Thanks to this, our industry has been able
to survive for the time being.
The problem is not over yet, though, and this is why we created a
Global Forum on Steel Overcapacity in which the EU and US work together
with China and others to address the root causes of the problem. This
group aims at identifying and eliminating overcapacity and support
measures that fuel it. Such work should be expedited. And we should also
better enforce WTO rules and ideally update rules on subsidies which
are incomplete and do not cover well all situations. This would provide
stronger discipline on massive subsidies that can create distortions and
hurt EU and US companies.
The EU already started to work with the US on this agenda. This is
why we have created a trilateral cooperation on level playing field also
with Japan. A first meeting took place this weekend in Brussels on
which Commissioner Malmström will debrief you. Work will accelerate and
intensify in the near future.
We hope that China will understand the value of a strong rules-based
order and join our effort, even if it means going further in the reform
of their economic model where the state still has a strong role.
In the meantime, we sincerely hope that the process of exclusion on
EU steel and aluminium exports from the scope of US measures will be
expedited, transparent and smooth. We believe that our exports do not
cause any threat to US security. Commissioner Malmström had a bilateral
exchange with US Trade Representative Lightizer on this matter in the
margin of the trilateral meeting this week-end and can tell you more
about this.
Commissioner Malmström's opening remarks:
As you know, President Trump has signed off on import duties of 25%
on Steel and 10% on aluminium last week, under Section 232 of the 1962
Trade Expansion Act - a US law from the Cold War! -and justified on
national security grounds. These measures will enter into force the
night between 22 and 23 March....
We regret the adoption of these measures. Justifying tariffs on the
basis of national security considerations risks undermining the
multilateral trading system. Moreover, the European Union, friends and
allies in NATO, is not a threat to the national security of the US.
During my meeting with USTR Lighthizer last Saturday, I made clear to
him that we are very disappointed indeed that longstanding allies and
security partners from Europe need to justify their exports of steel and
aluminium and to prove that they are not a threat to US national
security.
We are of the firm view that the EU should be excluded from the
Section 232 measures announced last week and I made this very clear in
my meeting with Ambassador Lighthizer.
Unfortunately, I did not leave last Saturday's meeting with
sufficient clarity as regards the exclusions. We are in contact with US
counterparts to obtain more clarity as soon as possible and we have been
told that the USTR will publish very soon on their website a more
detailed outline of the procedures for the exemptions.
This would be very damaging to transatlantic relations and the global
rules system based on a common global order that we have constructed
together with our US partners. And if the EU is not to be excluded from
the measures then there would have to be a firm and resolute, but
proportionate, response. We are continuing the preparations to ensure
that we can respond in line with the WTO rules, in the event that the EU
would not be excluded from the scope of the Section 232 measures.
Last week, the college of Commissioners discussed three strands of
work for future measures. They would defend our interests and those of
the trading system.
They would be fully in line with international obligations and by the book.
The first strand is that we would execute our rights in the WTO. We
are talking to friends and partners around the world who are also
affected by the 232 decisions and who would be impacted by these
measures, to see if we can coordinate our rights in the WTO.
Because WTO proceedings take time, we're also looking at other, immediate measures.
The second track is to protect our market from potentially significant trade diversion.
By the US's own assessment steel imports should be reduced by 13
million tonnes. There could be a surge of steel or aluminium imports
into the EU following US tariffs.
So we are preparing to put in place our own safeguard measures, while
maximizing our openness. We urge our trading partners to do likewise.
We do not want to encourage further closing of steel and aluminium
markets.
We suspect that the US move is effectively not based on national
security considerations but an economic safeguard measure in disguise.
The EU is entitled use the WTO Safeguards Agreement to rebalance the
benefits we have granted to the US in the past.
This allows measures corresponding to the economic loss suffered. And we are discussing different US products.
With these three tracks that we are discussing, we are ready to act
in a proportionate way according to WTO rules. We do not want things to
escalate. We do not share the view that trade wars are good and easy to
win. On the contrary they are very bad for the world and they are very
easy to lose. So things should not be escalated, we will manoeuvre
carefully, but we have to protect the interests of our citizens and our
jobs.
Dialogue with the US is intense. It is continuing this week and we
hope that very soon we can report to you with more detail on the outcome
of this.
Thank you very much I am looking forward to the debate, Mr President.
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Commissioner Malmström's closing remarks:
Honourable Members of Parliament, let me answer a few of your questions.
The EU is among the countries most affected by this, but there are
others as well who export steel. On exactly how it would strike the
European Union, we are in a close dialogue with the Member States. There
are 9-10 countries affected in the EU, but the consequences are of
course much larger.
The Australian exception we do not know much about. The exceptions
for Canada and Mexico are related to a satisfactory outcome of the
negotiations on NAFTA. So we are still searching for more information
there.
The EU is of course a security partner to the US going back a long
time. We work together in NATO. We have stood together in Iraq, in
Afghanistan, and many other places in the world. We are cooperating in
the fight against Islamic State, and our friendship and strategic
partnership goes way back.
On tariffs, we need to clarify a few issues. Yes, the EU has tariffs
on cars vis-à-vis the US and other countries. But the US has higher
tariffs on other items. For instance, there is a 25% tariff on trucks
and pick-ups. You cannot discuss tariffs unilaterally – we try to take
away tariffs in trade agreements. When there are no agreements, these
are tariffs. And they are not only vis-à-vis the US; they are for all
countries with whom we do not have trade agreements, so that's why you
cannot negotiate tariffs individually. It's part of a bigger picture.
We believe that this US measure is a safeguard in disguise; that the
security exception that does exist in the WTO, but which is meant to be
used for wartime, is misused. So we are confident that we could win such
a case in the WTO. And we are reaching out to other friends and allies
to see if we can have a joint approach here.
On trade distortions – that is why we have the safeguard measures that we are ready to put in place.
Whether a summit is a way to solve this is beyond my pay grade. I
think we have to try to solve these issues quite urgently, actually.
But as long as the measures have not entered into force, we hope to avoid a significant trade dispute.
The root problem, as many of you have said, is overcapacity in steel
and aluminium sectors. Certain countries are using massive subsidies and
producing under non-market conditions. So the EU and the US should –
and we already are – work together on this. And the EU has, from our
side, done our part.
With your help, we have modernised our trade defence instruments. We
are using them, upholding rules against those countries who distort
trade. And that is why we met together with the US Trade Representative
and also with Minister Seko from Japan this weekend, to discuss how we
can work jointly to face this challenge. We achieved a to-do list, an
action plan; and we will meet again on this topic. It was a very
constructive meeting, with the aim to work to improve the level-playing
field.
Protectionism is never a good answer. That is why we are reaching out
to other parts of the world in order to jointly stand up for the
principles of the international global trading system – the rules-based
system, the multilateral organisations.
The WTO is not perfect but it has served us well. Both us, the US and
other countries of the world, and we'd rather work together to
strengthen it, not weaken it. This is also why we are reaching out to
other countries and have an ambitious negotiating agenda. We are
creating a circle of friends with partners across the world who firmly
believe that trade is a good thing. We do good trade agreements based on
fair, transparent, sustainable trade, good for our people and for our
companies. That is why we stand up to this in the framework of the WTO
system.
I want to thank you for the strong support you have given to the
Commission, and to our approach to adopt WTO compatible measures. We are
doing this in a measured and calm way.
I also want to thank you, because I know many have been reaching out
to US counterparts in Congress and elsewhere. That is indeed very
useful.
Thank you very much for this debate. Thank you Mr Speaker.
Vice-President Katainen's closing remarks:
Thank you very much for this House's very strong support to the policy that the Commission has adopted in this file.
It's very important that the whole EU is united when addressing these
kinds of trade issues and difficulties. We also acknowledge in the
Commission the good cooperation with the Congress of the United States.
Both main parties, Republicans and Democrats, share the view on
rules-based world order and rules-based trade with us. We have to
acknowledge this good cooperation.
Also the business sector of the US shares the views of ours. So we
have to acknowledge this. This is not a dispute between Europe and the
United States as such.
So, that's why the Commission will concentrate on problem-solving instead of provoking further problems in this file.
So, what we want to do is to clear up this mess. I think there are
good reasons, which both sides will at the end of the day accept, that
we don't need; we don't want a trade war. Instead, we should concentrate
on improving our trading conditions between the two trading blocks,
like-minded continents.
Honourable members, this incident is a good reminder for all of us.
When we want to build or harness globalization, it must be based on
rules-based world order, instead of the rule of the strongest.
Trade agreements are good examples of building rules-based world
order. Actually the reality is as simple as this: we have to choose
between the two options: either we want to have trade agreements, which
bring values to trade, which strengthen the rules-based world order, or
then we are in a situation where we are at the moment, where arbitrary
decisions can harm all of us.
So, honourable members, we try to find a solution as soon as possible
and we want to enhance our trade and security cooperation with the
United States.
Thank you very much.
