AEGIS Press Conference against MES to China
As previously stated, in Europe, more than 300,000 jobs are covered by anti-dumping cases, and a third of these jobs are within the ceramic industry, where 80% of companies are SMEs. Currently there are 2 ongoing anti-dumping measures against China within the ceramic industry; ceramic tiles (2011) and tableware (2013).
If the European Union decides to grant Market Economy Status to China, i.e. allow using the distorted Chinese domestic prices and costs, the measures currently in place would be at risk. About 100,000 direct jobs would be lost in the ceramic tiles and tableware industries. As one job in the ceramic industry generates 2-3 indirect jobs, we estimate additional 200,000 - 300,000 indirect jobs would be affected.
The high complexity and administrative burden linked to EU TDIs make it very difficult for SME sectors to launch TDI investigations. This complexity explains why it took 6 years for the tableware industry to take action. In the meantime, imports from China increased their market share from 20% to 70% in the EU. As a consequence, the EU tableware industry lost 33,000 jobs out of 58,000. As a result of introduction of anti-dumping measures in 2013, further severe jobs loses were prevented and even new jobs were created. Currently, the EU tableware sector directly employs around 25,000 skilled, mostly female, workers. However, since the level of anti-dumping duties was lowered to a level of 17,9% at the definitive stage, dumping and injury in this sector have only partially been tackled and remedied. We see in practice that for consumer goods, a minimum level of around 30% duty is required for the measures to be effective.
By contrast, anti-dumping measures in the ceramic tiles sector of 30,6%, introduced in 2011, proved to be a lot more effective. As a result of these duties, imports from China decreased by over 65% and currently 60,000 – 70,000 jobs are impacted by anti-dumping measures. Most importantly, in the case of ceramic tiles, appropriate action was taken by the industry and the EU institutions as soon as the dumping practice occurred and rising imports from China started to cause injury to the EU.
Any decision resulting in weaker, more complex or less effective TDIs – meaning lower duties - would put around 100,000 jobs at risk in both, ceramic tile and tableware sectors and would endanger an industry that is innovative and strives for highest standards on health & safety, and the reduction of waste, energy and pollution.
Consequently The European Union needs a strong trade defence system. TDI instruments if weakened by granting MES to China would make EU manufacturing vulnerable to China’s structural overcapacity. Let me share with you an example of the ceramic tile industry:
- Tile production increased by more than six times in the last 20 years (1995 -2014)
- Tile production exceeds 10 billion sq. m. which is 10 times more than EU’s total ceramic tiles production. The Chinese production capacity is around 14 times the size of the EU consumption and production, and the overcapacity is 4 times the size of the EU consumption;
- A lower Chinese domestic consumption and an increase of ceramic tiles export by over 60 times, China represents a real threat of dumping of ceramic tile worldwide.
I would also like to point out that trade defence instruments targeting dumped imports of ceramic wall and floor tiles from China have been - or are being - introduced in Argentina, Brazil, Colombia, Mexico, India, Pakistan, Thailand Tunisia and South Korea.
So what is at stake for the EU ceramic industry? SMEs will be the first ones to be hit if MES is granted to China. Skilled workers, usually females and youth would be out of jobs and the EU does not have an alternative scheme to retrain these workers.
Cluster regions such as Sassuolo, Stoke-on-Trent, Castellon, Limoges, Aveiro, Civita Castellana are key drivers of the national economies would lose the ability to create jobs not only in the manufacturing but also in research centres, machinery development, and services. Our industry invests in research & design and cooperates with research centres; artists; architects and contribute to developing know-how in the sector. The ceramics industry would lose its ability to pass on tradition to future generations. And last but not least Europe would no longer be a world leader in quality & durable ceramic products
In conclusion, the burden of proof is on China to demonstrate it fulfils Market Economy criteria. Until then, the EU should not grant Market economy Status to Chinese (distorted) prices and costs for anti-dumping calculations. It cannot be up to SMEs to bear the burden of proof to demonstrate these distortions.
I would like to stress once again that any unilateral EU actions would be irreversible.
Confindustria Ceramica Press Office