Free Trade Kills Aussie Steel

Tuesday, April 05, 2016

Remember the great Bob Hawke plan to save the Australian steel industry in 1983? Bounties and anti-dumping measures would encourage BHP to concentrate on exports and thus save the industry from threatened extinction.

The John Button plan to save our car industry followed, with hope for an export-led revolution.

Today the Australian steel industry, or what is left of it, is fighting for existence because the Hawke-Button plan was a flop and China is dumping steel on the world market from its overgrown steel plants. The car industry is packing up too, partly because our trading partners won't allow our cars in.

Last week, workers at the surviving Port Kembla plant held a crisis meeting attended by three cross-bench senators. The industry minister did not attend. What the steel workers wanted was recognition of their plight and a government pledge to support or protect the Australian industry at a time when Chinese exports are flooding the world market to such an extent that the entire British industry is facing a shut-down with the loss of 30,000 jobs and its Tata-owned plant in Wales is on the market with no sign of a buyer.

The Port Kembla workers fear their jobs are about to go too. Obviously our free trade deals have done nothing to reinforce our own industry. The irony is that the Indian-owned Tata industry group has been loudly complaining about their European Union's open-door policy towards Chinese steel imports. Yet India blocks all imports of finished products from Australia and protects its own car industry with  tariffs of up to 60 per cent.

So the experts were wrong. The car industry has gone and the steel industry is on its last legs.

It need not have come to this. Sensible deals with our trading partners would have kept at least one car plant going, fed by Australian-made steel. Or we could have insisted that all imported vehicles be assembled with Australian-made bodies. The Chinese are only doing the right thing for their own people; we should do the same and prevent the complete de-skilling of our industry. It need not lead to a tariff war, just a sensible deal which keeps manufacturing skills in this country. Steel and car industries need a continuing input of research and development, updating of plant and a skills base - once they are gone it will be impossible to rebuild from scratch. 

Don’t forget that John Howard made a deal with China to sell off our precious gas at 3 cents per litre CIF. We can fuel our own industries by reserving cheap gas instead of exporting the lot at world prices.

Image: The Australian



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