Rising Trade Barriers
The European Steel Association (EUROFER) has requested the European Commission early this month to reduce its steel import quota by 75 percent from July this year. The drastic measure comparable to import suspension is because of a plummeting demand caused by the COVID-19 pandemic.
The European Commission implemented a safeguard in 2018 to apply a zero tariff to up to 100 percent of the average annual import volume for the period of 2015 to 2017 and impose a 25 percent tariff on steel imports exceeding the volume. The recent request of the association is to apply a zero tariff to up to 25 percent of the volume and block additional imports.
South Korean steelmakers, which anticipated a gradual increase in the quota, are expressing concerns. Each WTO member state invoking a safeguard must lower the level according to WTO rules and the European Commission has said that the quota would be increased at least to some extent each year.
The steelmakers’ concerns are because of the possibility of an unexpectedly reduced quota. The European Commission is planning to reset the quota in June after gathering opinions from the industry and EU member states.