Russia's Fund of Development of
Pipe Industry (FDPI) and the Russian Union of Metal Exporters (RUME) have issued a statement entitled, ’Concerning trade relations between the Russian Federation and the European Union (EU) in ferrous metals', addressed to the Russian government.
The statement points out the discriminatory attitude of the EU in trade relations between the parties concerned in the area of ferrous metals. It emphasizes that the many barriers enforced against imports of Russian steel products in the EU market, together with the ineffective protection of the Russian producers from the EU exporters in the domestic market, have created disadvantageous conditions for the Russian producers in both the export and local markets.
In particular FDPI and RUME identified three problems.
First of all, in July 2006, the EU imposed an antidumping (AD) duty to the amount of 24.1 percent and 35.8 percent against imports of Russian-origin seamless pipes. Both FDPI and RUME believe that the AD investigations which resulted in the implementations of the above duties were carried out with many inconsistencies, ’out of fear of the competition in the EU market'. As a result of the imposed duties, the EU market was almost completely closed to the Russian
pipe exporters.
Second, in November 2005, the Russian Federation's Ministry of Economic Development and Trade (MEDT) completed the AD investigations initiated against
stainless steel imports from the EU. As a result of these investigations, MEDT recommended the imposition of an AD duty against the products in question to the tune of Euro 840 per metric ton. However, the AD duty has not been imposed so far. Consequently, the EU
stainless steel importers continue to harm the Russian domestic producers, in particular Chelyabinsk Metallurgical Plant. The initiators of the current statement believe that if the current rate of
stainless steel imports from the EU will continue to rise, with imports currently accounting for an 85 percent share of the Russian
stainless steel market,
stainless steel
production in Russian may cease to exist in the near future.
Third, for the last ten years, Russian exporters supplied their steel products to the EU, based on allocated quotas decided upon yearly. FDPI and RUME believe that this conditional exportation is against liberal principles in trade. Given the fact that some Russian steel mills have steel assists in
Romania and
Bulgaria and that those two states will enter the EU in January 2007, the EU is denying the free access of these Russian producers, in particular TMK and
Mechel, to their subsidiaries. The organizations believe that it is necessary to allocate an additional 120,000 metric tons of
wire rod for
Mechel's subsidiaries' EU quota and 70,000 metric tons of round billets for TMK's subsidiaries' EU quota.
The initiators of the statement believe that above-stated problems need to be considered by the Russian government as soon as possible to ensure the protection of the Russian producers' interests both in the domestic and export markets.