WELLINGTON: In recent weeks New Zealand’s largest private sector union E Tu, the opposition Labour Party and sections of the media, have joined steel companies in alleging that China is “dumping” cheap steel on the New Zealand market. The union is demanding that the Ministry for Business, Innovation and Employment (MBIE) formally investigate a complaint laid by Pacific Steel Group (PSG) in July. On August 19, E Tu organiser Joe Gallagher declared that “jobs and the very future of our steel industry are at stake.”
Robin Davies, CEO of PSG’s sister company NZ Steel, the largest steel producer in the country, told Radio NZ he was “very concerned” about “a massive oversupply from China.” He declared that “Australia, Canada, the EU, large parts of Asia, have all brought trade remedies for anti-dumping and countervailing duties on steel to date. New Zealand is just about the only country that hasn’t.” Both PSG and NZ Steel are subsidiaries of Australian-based BlueScope Steel.
These punitive trade measures against Chinese imports are a reactionary nationalist response to the ongoing global slowdown and slump in steel demand, particularly in China and Asia. The glut in steel has led to downward pressure on prices, unleashing a ruthless competition for market share. The Obama administration, backed by the unions, is demanding the shutdown of industrial capacity in China to boost the international competitiveness of US corporations.
Chinese companies, which produce half the world’s steel, are already preparing to eliminate around 500,000 jobs, while seeking to sell their excess output on world markets. Tens of thousands more jobs are being axed globally.
According to New Zealand media reports, Chinese officials warned major export companies that any investigation of dumping complaints could provoke reprisals. China is New Zealand’s largest trading partner. Labour has accused the National Party government of trying to cover up China’s threats. Some NZ kiwifruit imports have been held up at Chinese ports in the past month, but the government has denied that this is a response to the steel dispute, blaming it on a “technical” issue.
The union attack on Chinese steel “dumping” marks a significant escalation in the anti-Chinese campaign waged by the opposition since 2012. Over the past four years Labour and its allies, including the Greens and Maori nationalist Mana Party, have denounced the sale of farmland and houses to Chinese people. Labour has joined the anti-immigrant NZ First Party’s scapegoating of Asian immigrants for unemployment, the high cost of housing and under-resourced social services.
This campaign takes place in the context of escalating geo-political tensions brought about by Washington’s strategic “pivot” to Asia and US naval provocations against China in the South China Sea. The US is strengthening military ties with various countries, including Australia, Japan, and the Philippines, in line with detailed plans already drawn up by the Pentagon for war against China.
The New Zealand ruling elite is caught in an increasingly fraught dilemma: it derives considerable profits from trade with China but relies on its military alliance with the US to further its own neo-colonial interests in the Pacific and throughout the world.
Despite the government’s caution in openly siding with the US against China, it has committed to $20 billion in military spending to boost “interoperability” with US forces, while NZ’s spy agency carries out surveillance on China on behalf of the US. A pointed editorial by the Chinese state-owned Xinhua news agency in April warned that if New Zealand foreign policy was “hijacked by the ambitions of its military allies” this would “risk complicating the flourishing trade ties between China and New Zealand.”
Claims of Chinese steel “dumping” were made immediately prior to US Vice-President Joe Biden’s July visit to New Zealand to further strengthen the military alliance. E Tu has been coordinating its campaign with the United Steelworkers (USW) union in the United States. A July 22 Fairfax report quoted the USW’s Ben Davis: “We are working with steel workers’ unions around the world to partner with major producing companies to support their work to strengthen anti-dumping laws.”
