Insight

Dr Volker Lederer, president

We are going through times of great uncertainty regarding the geopolitical shifts in power. World politics is increasingly determined by several major players. The world order is changing, and as it seems not necessarily in the spirit of our industry.

China’s political and economic power has grown greatly in importance over the past few years. The US is moving away from the WTO’s rule-based free trade system, which is so important to us traders. Europe, too, is being put to the test. BREXIT, whatever form it may take, will change the relationship between the United Kingdom and the European Union. The internal market, at the heart of the EU, will become poorer losing one of its major economies. Free trade across the Channel will be restricted. What we have taken for granted in post-war Europe – the achievements of the free movement of goods, people and capital – is no longer guaranteed. Nobody would have believed that only ten years ago.

We must prepare ourselves for such unprecedented changes to the existing order. They affect us fundamentally. Both the European Fasteners Distributors Association (EFDA) and the fastener distributor companies worked on that during 2019. We will also deal with this in 2020, no question about it.

The trade war between the USA and China affects the whole world. European fastener distributors notice that the Chinese are trying to sell a larger part of their production, which they no longer sell in the USA, on the European market. However, demand from European importers is more subdued than before due to the overall deteriorating economic situation.

We sincerely hope that the EU will stick to the rules on free and fair trade established by the WTO and not follow the protectionist and unreliable policy of the US administration.

Fortunately, I can say today that EFDA is prepared to defend free and fair trade against any protectionist measures. We use our good network and import and market data to be prepared for possible scenarios that could lead the European Commission to take protectionist measures. I am thinking, for example, of an anti-dumping case concerning imports of fasteners from China. Our continuous information helps our member companies to be well prepared in any case.

Recently the Commission reopened the investigation regarding the circumvention of anti-dumping duties on iron and steel fasteners from China through Malaysia. The investigation is the result of a decision by the Court of the European Union saying the Commission had violated some formal provisions in its former investigation in the year 2011 by not taking careful attention of the submission of a Dutch fastener importer.

In its submission to the Commission EFDA made it very clear that it is committed to free and fair trade in the global fastener market, that if the Commission had carefully listened to EFDA and taken the interests of the fastener importers seriously in account, a lot of damage to the industry, but also to the Commission, could have been avoided, and that the Commission would be well advised to actively consult with the importing and distribution sectors as legitimate and significant stakeholders and contributors to the EU economy in future anti-dumping proceedings.

Another challenge for EFDA and its members is the increasing regulation of the supply chain as it creates a lot of bureaucracy for fastener distributors. EU legislation such as the regulation on chemicals (REACH) or the EU directive on the Restriction of Hazardous Substances (ROHS) have a strong impact on the day-to-day business of our companies in all EU member states. We need answers for the problems to be solved. Our companies need more and more experts to cope with these technical issues. To better assist our companies, EFDA started in 2019 to focus its work on these issues through its work in its technical committee and promote the exchange of knowledge.

With regard to our organisation, EFDA will try to further grow and gain more members to support our activities. EFDA was founded in the year 2000. With EFDA, European distributors actually began to fight for their interests at European level. Today, I am proud to say, EFDA is THE voice of European fastener distributors at European and international level. Next year EFDA will have its 20^th anniversary. We are planning to celebrate this event in the European Union’s capital Brussels. This is not only a good occasion for networking but also to promote free and fair trade in a politically uncertain world.