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Unilateral national action will only isolate you

Interview with Foreign Minister Sigmar Gabriel on the US government’s imposition of duties on two German steel companies. Published in the “Rheinische Post” newspaper on 3 April 2017.

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The United States Department of Commerce has imposed dumping duties on two German steel companies. For setting the rates, it apparently used calculation methods that provide a competitive advantage to American companies and are not in line with WTO rules.

That’s true. I must say that I’m baffled, to say the least, by this decision taken against our two steel companies, Salzgitter AG as well as Dillinger Hütte in Saarland.

I think the Department of Commerce’s decision is wrong. The EU and the German Government have repeatedly made clear that we expect the new US administration to observe WTO rules. Had it done so, it would have decided differently, namely in favour of our companies. Currently, the United States Government is sending the signal that it is prepared to give preferential treatment to American companies, even if this violates international law.

That’s protectionism. We Europeans will not stand for it.

These days, what is a more existential problem for German steel producers: state‑subsidised cheap steel from China, or the protectionism of the new US president?

Our steel companies need fear neither their US nor their Chinese competitors, or competition from anywhere else in the world – as long as trade is fair.

That’s why I support the German steel industry’s demand for fair competition and a global level playing field. It doesn’t really matter who’s breaking the rules in this case. The same rules must apply to all producers everywhere.

So far, the problem has been limited to Dillinger Hütte and Salzgitter. How much of a risk is there, in your view, that other German steel companies – especially in North Rhine‑Westphalia – may also be targeted by the US government?

Well, one really can’t say right now. The new US administration hasn’t been in office long enough for anyone to make a sound prediction. But it’s obvious that there is the tendency to take further protectionist action.

However, US duties that violate internationally agreed WTO rules will not be accepted in Europe or in Germany.

We’re confident our demands are justified, so let’s just wait and see what happens.

As German Foreign Minister, are you not stepping outside of your Ministry’s remit? It should be up to your successor, Brigitte Zypries, to ensure that the interests of the German steel industry are defended by the European Commission. She is, after all, the new Economics Minister.

That’s precisely what Brigitte Zypries is doing, in a joint effort with me, just like I worked together with Frank-Walter Steinmeier. In Germany, there’s a long tradition of interministerial cooperation. This works very well. In recent weeks, the Economics Minister has rightly taken a decisive stance defending fair trade and urging that WTO rules be respected.

It is important to note that the Commission has strongly supported our initiative. The Commission and the Federal Government enjoy close cooperation.

What specific actions are the Federal Foreign Office and the Federal Ministry for Economic Affairs pursuing with a view to protecting producers from Chinese cheap steel? Are the most recent protective tariffs imposed by the EU sufficient?

Our efforts are primarily aimed at strengthening the European position in these disputes, also because this is proving effective. The economic outlook of German steel producers has improved slightly as a result. In discussions with our Chinese partners, we have been making unmistakeably clear that fairness cannot be a one-way street. It applies equally to everyone all over the world who wants to produce in, or export their products to, Europe.

The most effective way for us to defend the competitiveness of Germany’s industry is for us to strongly insist on adherence to international rules and agreements.

Should Germany make greater use of its G20 Presidency to challenge these new calls for protectionism and warn about the threat of trade wars?

Everyone involved must be aware that any resurgence of protectionism would be equivalent to throwing a monkey wrench into the global economy. Even at the height of the financial crisis in 2008, the large economic powers withstood the temptation to engage in protectionism. There is no reason to not also resist that temptation now.

The success of short-term protectionist action is always short-lived. In a globalised world, unilateral national action doesn’t lead to success, but rather only isolates you.

Germany doesn’t need to lecture anyone on this. It is common sense, and it is already common knowledge among the G20.

Interview conducted by Maximilian Plück.

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