The Welsh Affairs Select Committee’s inquiry into globalisation and its impact on Wales is proving a fascinating exercise.
Yesterday, the Committee took evidence from directors of Corus, the steelmaker recently taken over by Tata of India, which operates the plant at Port Talbot, and representatives of the steel workers’ union, Community.
There was a remarkable degree of agreement between the representatives of what used to be called “the two sides of industry”. All the witnesses expressed concern over the migration out of Europe of steelmaking capacity. The principal reason for this, apart from the low cost of labour in countries such as China, India and Brazil, is that the European Emissions Trading System operates against EU steel producers and gives an advantage (some might say an unfair advantage) to steelmakers in the developing world, who are not bound by the Kyoto protocol.
All the witnesses were calling for a global sector-wide protocol on emissions, so as to level the playing field between Europe and the developing world. However, China’s dash for industrialisation makes this a rather unlikely prospect. There would be nothing in it for the Chinese. Indeed, China is now the world's biggest exporter of steel and there was also a report today (albeit later denied) that it has overtaken the USA as the biggest emitter of greenhouse gases. China is determined to become the number one manufacturing nation on the planet and is unlikely to be over-concerned about environmental niceties, at least in the medium term.
It is a truism to observe that we live in a changing world, but the current pace of industrial change is nothing short of startling. Unless the EU both reassesses the regulatory burden it imposes on industry and engages urgently with China, India and other developing nations over their industrial practices, we will soon find that the world’s entire manufacturing base has moved east of Suez or south of the Equator.
Yesterday, the Committee took evidence from directors of Corus, the steelmaker recently taken over by Tata of India, which operates the plant at Port Talbot, and representatives of the steel workers’ union, Community.
There was a remarkable degree of agreement between the representatives of what used to be called “the two sides of industry”. All the witnesses expressed concern over the migration out of Europe of steelmaking capacity. The principal reason for this, apart from the low cost of labour in countries such as China, India and Brazil, is that the European Emissions Trading System operates against EU steel producers and gives an advantage (some might say an unfair advantage) to steelmakers in the developing world, who are not bound by the Kyoto protocol.
All the witnesses were calling for a global sector-wide protocol on emissions, so as to level the playing field between Europe and the developing world. However, China’s dash for industrialisation makes this a rather unlikely prospect. There would be nothing in it for the Chinese. Indeed, China is now the world's biggest exporter of steel and there was also a report today (albeit later denied) that it has overtaken the USA as the biggest emitter of greenhouse gases. China is determined to become the number one manufacturing nation on the planet and is unlikely to be over-concerned about environmental niceties, at least in the medium term.
It is a truism to observe that we live in a changing world, but the current pace of industrial change is nothing short of startling. Unless the EU both reassesses the regulatory burden it imposes on industry and engages urgently with China, India and other developing nations over their industrial practices, we will soon find that the world’s entire manufacturing base has moved east of Suez or south of the Equator.
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