Protecting the Domestic Steel Industry: EU Implements New Steel Import Quota Measures Starting Wednesday
The European Commission unveiled on Tuesday a new quota system aimed at limiting duty-free steel imports into the EU, with the goal of protecting the EU steel industry and improving its capacity utilization. Under the new rules, the EU's annual duty-free import quota has been significantly reduced by 47%, down to 18.3 million tons; meanwhile, a 50% tariff will be imposed on steel imports exceeding the quota for 26 specific steel products entering the EU. The Commission stated that this regulation, effective from July 1st, aims to raise the EU steel industry’s capacity utilization rate to 80%.
However, the European Steel Association (Eurofer) noted that due to weak demand, the rule adjustments may only increase capacity utilization from the current approximately 67% to between 73% and 75%.
Eurofer’s General Director Axel Eggert said EU steel producers could potentially recover around 15 million tons of output—equivalent to about half of the production lost over the past few years.
The European Commission stated, “This implementing regulation aims to minimize the impact of EU steel rules on its free trade agreement (FTA) partners while not undermining the effectiveness of the measure—80% of the EU’s steel imports come from FTA partners.”
The Commission further explained: “Of the 18.3 million tons annual import quota established under the EU Steel Regulation, half is specifically reserved for FTA partners, while the other half is open without discrimination to all trading partners, including FTA partners. Therefore, compared to the expected average reduction of 47% under the Steel Regulation, EU FTA partners will retain a larger share of access to the EU market.”
The Commission added that many of these partners will receive country-specific quotas proportional to their past trade volumes. It emphasized: “Thus, for most of the EU’s FTA partners, the reduction in market access will be significantly lower than the average 47% decrease anticipated under the Steel Regulation.”
The Commission revealed that a “substantial number” of partners have already expressed preliminary acceptance of these quota allocation schemes. The Commission stressed that the introduction of these rules is intended to protect the European steel industry from global overcapacity and dumping practices elsewhere in the world.
The Commission claimed: “The persistent global overcapacity issue in the steel sector remains severe and continues to distort international markets.” It added: “This measure aims to restore fair market competition to counteract market distortions caused by overcapacity.”
Eggert said that for the measure to have a more significant impact on the steel industry, it might need to be extended to downstream sectors, such as companies involved in steel rolling or producing auto body panels.
Source: rfi
Original article: toutiao.com/article/1869478583713867/
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