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AD525 Proposed Antidumping measures on steel fasteners from China

The title of this entry is not likely to entice the casual visitor to read on. I don't suppose that 0.05% of the population of the EU have ever thought about carbon steel fastenings, let alone how many are imported from China, let alone what the EU Trade Commission decide about the pricing of these things.

I didn't until I discovered that no Chinese factory will quote for fastenings to be supplied to the EU. Even plasterboard kits, with the board itself, channelling and fastenings, are impossible to obtain quotes for. It is remotely plausible that the Chinese really are seeking to destroy EU factories making nails, but it's hard to imagine that this is a more plausible explanation than that Chinese factories have such a huge advantage in terms of currency exchange rate and the costs of all factors of production that they can indeed sell for less than the marginal cost of production in EU factories, especially in high-cost economies such as Germany, France, Italy and the UK.

The result is that competition is destroyed and we have all ended up paying more for everything that is produced using these fastenings. Maybe this was a price worth paying for the jobs that have been 'saved'. But undoubtedly the finished goods manufacturers who had to bear these higher costs of fastenings will have laboured under the disadvantage of a higher input cost and a reduced competitiveness. Who can really say whether the consequent reduced production in these industries will have been less, in terms of employment, than the higher employment in the fastenings business?

Maybe I'm missing something. I am certainly no economist. Maybe the inscrutable Chinese really have a cunning plan to flood the EU with cheap screws and nails, then, when all the West Midland nail factories have gone under, suddenly increase the price of nails and bring our economy to its knees. From what I can tell, borrowing from our banks would have been a much more effective way of doing that.

Of course, the Commission, in its infinite wisdom, have seen fit to keep the proposal out of the public view. It is possible that an email to trade-ad-fasteners@ec.europa.eu requesting a copy will produce one. Why this might be possible when the document has not been posted on a website will remain a mystery to me until the day I die, I'm sure.

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This page contains a single entry from the blog posted on November 14, 2008 3:55 PM.

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