The Eurasian Economic Union (EAEU), which consists of five nations including Russia, announced on June 10 (local time) that it will impose a one-year safeguard measure on imported hot rolled steel sheets. The automobile steel sheet, which is one of Korea's major export items, has been excluded from this safeguard measure. The EAEU is an economic coalition of five countries: Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.
According to the Ministry of Trade, Industry and Energy (MOTIE), the EAEU will impose a 25 percent tariff on excess hot rolled coil imports beyond the quota for one year. Coated steel and cold rolled coils have been excluded.
Average annual imports from 2015 to 2017 are treated as the tariff-free global quota (996,596 tons), with a 25 percent tariff imposed only on the excess imports beyond the quota.
Korea exported 207,000 tons of steel to EAEU last year, with coated steel accounting for 52 percent, hot rolled coils 45.7 percent and cold rolled coils the remaining 2.3 percent. Korean exporters are unlikely to face difficulty exporting hot rolled coils to EAEU, given that tariff-free export is applied to up to 100 percent of the average import volume from 2015 to 2017 and that the safeguard measure will be imposed for one year.
The Korean government has called for the withdrawal of safeguard surveys that do not meet the requirements of the WTO Agreement through bilateral and multilateral channels. It has also requested the EAEU to exclude such items as steel products for automobiles and gas pipelines, which cannot be produced in the region, if safeguard measures are inevitable.
The EAEU will notify the WTO of the final action and plan to finalize it in August after consultation with interested parties.