As the new regulation aimed at protecting the EU steel sector from global steel overcapacity (see EUROPE 13848/3) is due to enter into force on Wednesday 1 July, the European Commission adopted, on Tuesday 30 June, an implementing regulation setting the tariff quotas allocated to the EU’s various trading partners, in other words, the volume below which those countries will be able to export without having customs duties imposed on them.
The European Union is in fact seeking to protect its industry by making permanent temporary safeguard measures adopted in 2018, which expire on 30 June. With China producing more than half of the world’s steel, low-cost Chinese exports are a major source of concern in Europe.
However, unlike certain trade defence instruments, the steel measures are not targeted, a senior European official insisted. “We are indeed seeing problems on certain markets, but not only in China: there is overcapacity in Türkiye, in India… The structural nature of overcapacity is present in other countries too”, the same official said.
Preferential access. The regulation provides for the total volume of steel import quotas to be reduced by around 47% compared with 2024, to 18.3 million tonnes per year. Of those 18.3 million, half will be reserved exclusively for trading partners enjoying preferential access to the European market, notably through free trade agreements, the Commission explained. The other half will be accessible to all of the Union’s trading partners, including those enjoying preferential access to the European market.
The European Union has concluded agreements in principle on duty-free tariff quotas with 13 countries, including the United Kingdom, Switzerland and Ukraine. Kyiv will have privileged access, in view of its particular situation, the regulation specifies (see EUROPE 13870/18).
Compatibility with the WTO. The European Commission drew up this allocation of tariff quotas as part of negotiations with its partners on the basis of Article 28 of the General Agreement on Tariffs and Trade (GATT), which governs the modification or withdrawal of tariff concessions.
Beyond these bilateral negotiations, the institution says it remains determined to address the issue of global overcapacity at international level and will continue the dialogue with its trading partners within the World Trade Organization, under Article 28 of GATT.
As the quotas have to be allocated from 1 July, the Commission is using an urgency procedure. The Member States will have to validate the text within 14 days of the adoption of the implementing regulation. The latter will remain in force for a maximum period of six months, before being reassessed within the competent committee of the Member States (comitology) at the end of 2026.
Link to the implementing regulation: https://aeur.eu/f/mnt (Original version in French by Juliette Verdes)