The extension of the EU steel safeguard for another three years has been published today. This measure will ensure there is a modicum of certainty for EU steel producers, provide ample access to third-country supplies of steel for users, and help ward off disruptive post-COVID surges of steel imports.
“We welcome that the EU steel safeguard regime has been extended,”, said Axel Eggert, Director General of the European Steel Association (EUROFER). “The conditions that required the launch of the safeguard initially are still very much present – including global steel overcapacity and US Section 232”.
The EU steel safeguard will, in principle, be prolonged by three additional years from 1 July 2021 to 30 June 2024, with an automatic annual liberalisation of 3%. The safeguard can also be reviewed every year after the first year. The extended safeguard would apply to the same products as it does now.
“This extension provides ample opportunity for users to source material they might require from abroad, as the tariff-free quota level is now at least 15% higher than the record import levels on which the safeguard’s tariff rate quota is set – the years 2015-2017”, added Mr Eggert. “This measure mainly provides a safety net in the event that a sharp surge in imports occurs”.
The EU steel safeguard is not a measure to stabilise prices on the domestic market, and it does not restrict normal supply to the market. European downstream users of steel can still access all the third-country steel they need based on traditional trade flows. Over the past three years, the size of the unused quota has grown – and there is plenty of space in the tariff-free quota for users to satisfy their material needs.
“The current state of demand-supply disruption in the global steel industry – and in many other sectors – follows in the wake of the COVID crisis. However, it has nothing to do with the safeguard”, Mr Eggert said. “Instead, the recovery of steel demand and the wider economic rebound has inspired a rush for material after the countercyclical destocking seen during the downturn”.
The EU steel safeguard extension was voted upon by EU Member States on 18 June 2021. WTO members were notified of the proposed extension on 11 June 2021. The Implementing Regulation was published on 28 June 2021.