The European Union (EU) is struggling to find balance in its relations with China amid a dispute among members over anti-dumping tariffs levied on steel products from the Asian country.

The organization's Dutch presidency, with strong support from the UK, is resisting pressure from the European Commission (EC) and other member nations to strengthen the continent's trade instruments against steel imports from China.

Like Us on Facebook

The dispute centers on the organization's "lesser duty rule," which cuts the size of the anti-dumping tariffs on imported Chinese steel to the limit of what is strictly necessary to prevent an injury of the continent's domestic industry.

Lesser Duty Rule

The Commission had proposed to curtail the rule in 2013, a move supported by France and a number of other European countries who say the conditional provision greatly diminishes the effectiveness of the anti-dumping tariffs against China's steel products.  

The Anglo-Dutch alliance has rejected this position, saying that higher duties are possible within existing EU rules.  The two countries likewise argue that lifting the lesser duty rule would bring harmful consequences to other parts of the value chain, and ultimately hurt consumers.

Speaking to the members of the EU's Competitiveness Council on Monday, French economic minister Emmanuel Macron said "the only way" to protect the continent's steel industry is to bring the subject to the table of the organization's trade ministers.

The adoption of the proposal made in 2013 would bring greater effectiveness to the anti-dumping duties imposed on Chinese imported steel, Macron told council members, because it would allow the EU to raise current duties to a more "credible level."

The council has since issued a statement urging steps to hasten the process of imposing further anti-dumping measures in a bid to stop China's low cost steel from dominating the European markets. 

"Blatant and Unfair"

When asked about the issue later in the week, a spokesman for the EU's Dutch presidency said the EC has launched a public consultation to come up with a new proposal on the lesser duty rule. 

Any attempt to forge a consensus before the Commission issues its new proposal in June or July would not make sense, the spokesman told EurActiv news.

China's overcapacity has been a key issue in the global economy for the past months, and is becoming a growing political issue in Europe.

Unable to match the low prices commanded by Chinese steel, the European steel association (EUROFER) has warned that hundreds of thousands of European workers stand to lose their jobs if the EU fails to address the problem soon.

Despite current anti-dumping measures,  concerns over job security continue to fuel moves to impose even higher duties against the massive influx of China's low cost steel into the European market. 

The EU debate comes even as members of the British Labour Party have mounted a vigorous effort to urge the Cameron government to scrap the lesser duty rule altogether.

"To work, tariffs have to be high enough to deal with the problem -- the EU tariffs are not," Labour's Andrea Eagle said during a debate in the British Parliament on Monday. "It is important to make it crystal clear that we are objecting to blatant and unfair dumping, not free trade."

TagsEU-China, China Faces Anti-Dumping Petitions, industrial overcapacity