The European Commission has today notified the World Trade Organisation (WTO) of its findings in the safeguard investigation on certain steel products. Based on these, the Commission intends to impose definitive measures to replace the provisional measures in place since July 2018.
This investigation was launched in March 2018 as part of the European Union's response to the decision by the United States to impose tariffs on steel products. It showed that imports of steel products into the EU increased significantly in the last years and that these imports are likely to increase further. This situation was aggravated by the trade diversion resulting from the US restrictive measures on steel taken under Section 232. The EU steel industry has not yet fully recovered from the global steel crisis. It is still exposed to further increases of imports and ensuing downward pressure on prices.
The proposed measures will be imposed erga omnes (against imports from all origins), concern 26 steel product categories and will ensure that trade diversion is avoided whilst maintaining traditional levels of trade in steel on the EU market. They consist of tariff-rate quota by which a duty of 25% will apply when the level of the traditional trade flows is reached. This system is similar to the provisional measures currently in place, with some variances in order to preserve traditional trade flows. For example, the main supplying countries will benefit from individual quotas based on their own historical imports.
Once adopted, these measures should remain in place for a period of three years, including the period of imposition of the provisional measures, expiring on 16 July 2021. The measures can be reviewed in case of changed circumstances.
The Commission's findings were previously submitted to EU Member States who will vote in mid-January on the Commission’s intended course of action. Following their adoption by the Commission, the definitive measures could enter into force in the beginning of February 2019.
The notification to the WTO is a necessary step under the WTO Safeguards Agreement and allows time for affected WTO members to hold consultations with the EU. The notification is published on the WTO website.
WTO members with a substantial interest in this case will now have the opportunity to hold consultations with the Commission before a final decision is taken.
The Commission intends to make its final decision after consultation with Member States and before the provisional measures lapse on 4 February.
The Commission imposed provisional safeguard measures on imports of steel in July 2018. The provisional safeguard measures can remain in place for a maximum of 200 days.
The safeguard measures are part of the three-pronged response outlined by the European Commission in 2018. As a result of the import duties applied by the United States as of 23 March 2018 under Section 232 the US Trade Expansion Act of 1962, exporting steel to the United States has become less attractive. As a consequence, steel suppliers have diverted some of their exports from the US to the EU.
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4 January 2019