|Volume 46 Number 10, April 16, 2016||ARCHIVE||HOME||JBCENTRE||SUBSCRIBE|
The British steel industry is going through a crisis that threatens its very existence. Rather than take either practical emergency measures or make longer term plans to safeguard the present and future of this essential part of the national economy, the government is essentially claiming that nothing can be done. This is despite opposition calls to bring the important plants threatened with sale and closure under at least temporary national control, as was done at the height of the financial crisis for the banking sector. The government, and much of the media, are promoting the view that the British steel industry is struggling to be "competitive" against "cheap imports" of Chinese steel.
On this view, the decision by steel monopolies such as Tata to sell off or close plants in Britain is simply business, a commercial decision. The problem is that the market is not a level playing field, so goes the argument. The blame is then laid with China, market conditions such as weak demand or the strength of the pound, or the "costs" of production in Britain.
These markets are dominated by the monopoles and the big powers in which they are based, and are used not only for making quick scores but also for control and for geopolitical ends. The call for a "level playing field" is a call for the steel monopolies to be able to compete freely in world markets. These monopolies should be free to do whatever it takes to make a quick score, come what may. The contrast with the bailout of the banking sector could not be more evident, when the schemes of the monopolies to make a quick score themselves came crashing down. It is also a call directed at China to block it from its programme to develop its national economy with a degree of independence from Britain, the EU and the US.
It is therefore said that the problem facing the steel industry is one of overproduction of Chinese steel, which is allegedly "dumping" steel on the European market. Responding to the accusation, Spokesman for the Chinese Ministry of Commerce, Shen Danyang, cited the falling price of iron ore as the underlying cause of falling steel prices. In the first eight months of 2014, the price of importing iron ore into China had dropped sharply from $110 to $63 per tonne, he said.
In fact, Britain exported 8.6 million while at the same time importing 7.4 million tonnes of steel that year. More than half, 4.7 million tonnes, of these imports come from Europe. Only a small fraction, 690,000 tonnes, came from China. It is therefore the trade relation with Europe that should receive attention. Indeed, just two years earlier in 2012, Mexican steel industry association Canacero made similar accusations against the EU as are now being made against China, expressing its concerns at rising imports to Mexico from Europe.
Britain, exporting more steel than it imports, has the potential to produce all the steel required by the national economy. Any surplus or deficit in production could be traded with other countries in a planned and controlled manner to the benefit of both Britain and its trading partners. In conditions of unrestricted monopoly-controlled trade, with local production competing with global production, to import such large quantities leaves the industry and the economy as a whole exposed to the full brunt of the markets. Furthermore, the closure of plants seriously erodes the self-reliant potential of the economy.
The root cause of the British steel crisis is the lack of any control over the economy and its direction by the workers and people of Britain. National chauvinist cries that Britain is under the dictate of foreign interests are a smokescreen to hide this fundamental issue and for Britain's own imperial motives.
The empire-building project that is the EU of the monopolies - itself in profound crisis - originated in the European Coal and Steel Community (ECSC) for control of European steel production for geopolitical ends, at that time in the context of the Cold War as well as in competition with US imperialism. It has always had this character and remains set against the development of self-reliant, sovereign local economies. Thus any serious emergency measures and long-term plans to safeguard and develop a national steel industry, particularly those that restrict the operations of the monopolies, are forbidden under EU competition laws.
This underlines that Britain should exit from all empire-building trading and geopolitical blocs such as the EU, not to "go it alone" and pursue its own imperial aims, or tie itself further to the US, but to develop a sustainable economy aimed at meeting the needs of the population in as self-reliant a manner as possible, with international trade conducted on a planned basis only where necessary according to the principle of mutual benefit. In such a situation, neither would the cheapest steel on the market, nor the imposition of tariffs, be an issue. To get drawn into rivalries between powers and monopolies over whether, say, it is better to buy Chinese or buy from the EU is a dangerous path beginning with national chauvinism and ending with open conflict.