Czech companies hit by proliferation of trade protection measures

22-06-2016

Czech companies are increasingly being hit by anti-dumping measures, the business daily e15 reported on Wednesday. Most recently, such measures have hit the Arcelor Mittal Czech steel giant in Ostrava. Earlier this year, China imposed customs duty of 46.3 percent on flat roll electrical steel produced in the European Union.

Photo: archive of Arcelor Mittal OstravaPhoto: archive of Arcelor Mittal Ostrava “We started regularly exporting to China in 2008. Between the years 2009 and 2013 we placed around eight percent of all our production on the Chinese market. After the imposition of the preliminary customs duty, exports were suspended and it wasn’t easy to place such amount of production on other markets”, spokeswoman for ArcelorMittal, Barbora Dvořáková, told the daily.

Such measures are increasingly having to be confronted by manufacturers. At the end of 2015, European exporters faced 151 anti-dumping, anti-subsidy and other protective measures, while in the previous year it was 140.

According to a regular European Commission report on the protection of trade in third countries, the number of such measures has increased by nearly a quarter since 2010. At the same time, the European Commission is currently considering ways of strengthening protection for EU countries against dumping from the rest of the world, especially from China and in particular in the highly vulnerable steel sector. EU producers complain that the continent is now a target for Chinese steel exports because of the relative slowdown of the construction and other large steel using sectors in China. They add that some of the exports are at dumped prices, that is less than production costs.

Czech producers are currently affected by five anti-dumping customs duties. In 2011, China imposed an anti-dumping tax on imports of caprolactam, a synthetic polymer widely used in textiles, produced by the Spolana chemical plant north of Prague.

The daily e15 quoted Jan Studený, the spokesman for Spolana, who said that “after the duty was imposed, export of caprolactam to China continued to drop and in 2013 it was suspended completely. At the moment, most of Spolana’s export is aiming at the central and western European markets.

Last year, Brazil threatened to close its market to Czech and Polish producer of raw chemical materials, Synthos, in retaliation for plans to impose anti-dumping tax duties on rubber. In the end, the decision was postponed by a year.

According to the calculations of the European Commission, the damages caused by protective measures taken by third countries reached hundreds of millions of euros a year. Only last year, 37 new measures were taken.

Most measures against imports from Europe were taken by India, China and the United States. Most customs duties concern steel products, which is a direct result of the world steel crisis.

22-06-2016