Italy tackling the EU tariffs
Urso: “Suspend import tariffs on raw materials”
On display on his desk there is already a stack of forty dossiers that speak volumes on the relationship between the WTO and the European Union. Work will certainly not be lacking in terms of open disputes for the new EU Trade Commissioner, Belgian Karel De Gucht. Among the knots to unravel - both with Europe on the attack (in 16 cases) and on the defence (the remaining 24) - are disputes with the United States and Canada. But arousing greater concern are the ongoing clashes with Asian countries (China and Korea at the top) over both manufactured goods (shoes, screws, bolts) and services, raw materials and anti-dumping measures.
Still fresh is the Chinese counter-attack regarding the import duties on shoes from China and Vietnam that was extended in January for another two years. The Chinese have appealed to the WTO and even if the appeal does not suspend the measure for the European producers, there is always the sword of Damocles hanging over the head of Brussels. If the extension is ruled unlawful, also footwear will number among the sectors in which there is no defence against Chinese competion.
Only yesterday, meeting his colleague De Gucht for the first time (in a bilateral conversation in the run-up to the informal meeting with the ministers of Foreign Trade), the Deputy Minister for Economic Development delegated for foreign trade, Adolfo Urso, asked the Commissioner to suspend the import duties on the raw materials which are still affected by the tariffs. These range from iron, steel, aluminium, carbon electrodes, to organic chemical products, hides, leather, wood, wood charcoal and silk.
The underlying philosophy is the need to protect the companies that are encumbered by duties when importing raw materials from abroad. So the question is not about being on the defensive but also on the attack against those countries which penalise imports of raw materials at a time of serious world crisis.
”Similar specific policies have also been adopted – said Adolfo Urso – by the European Union’s biggest competitor, the USA, which has recently drawn up a list of raw materials that are strategically relevant. The US has also put in place policies to guarantee their supply, keeping a stock of raw materials essential for the defence industry”.
«The unilateral suspension if so will be part of negotiations with the other countries”, says the Deputy Minister. “The suspension of these duties will greatly improve our companies’ competitiveness and further down the chain will generate clears benefits for consumers in terms of final price reduction of products. Zero duties on the one hand means maximum exposure of our market and on the other the potential possibility to better identify support mechanisms if other countries try to hinder exports of raw materials in the European Union”.
So why Italy – a country which is moreover clearly keen on starting up new anti-dumping procedures in certain sectors? The reasons are three-fold according to Urso: First, “Italy is a country that for the most part transforms raw materials so a tariffs suspension would immediately cut costs for companies and, further down the chain, prices for consumers; second, comes commercial policies: we are in favour of open markets not of protectionism, which was the first response - and certainly a mistake for some countries but not Italy - at the start of the international economic crisis; third, in this phase of transition between the recession and the possible recovery, every instrument – and the suspension of duties goes in this direction – is useful for propelling companies’ competitiveness and also for re-launching the consumption cycle”.
Access to raw materials is certainly proving to be a crucial factor for the European Union, and risks becoming one of the main battle fronts for trade. However confrontational, the proposal makes economic sense so now we must see how many European allies will be prepared to support it as a general strategy.
Rita Fatiguso – Il Sole 24 Ore (Monday)