The European Commission is unlikely to extend its current three-year steel imports safeguards system for more than one year, unless European Union steel producers can prove they continue to suffer or could suffer serious injury from imports, the World Trade Organization said March 2.
Measures imposed for more than a year must be progressively liberalized, and third country exporters to the EU could be offered compensation for any extension, the WTO said in response to inquiries from S&P Global Platts.
The WTO highlighted its position on safeguards following the EC's launch Feb. 26 of an investigation to determine whether current EU steel import safeguards – based on a tariff-rate quota system - should continue after the current system expires on June 30. The investigation has been requested by 12 EU member states, in view of "continuous significant import pressure from third countries and....the fact that global overcapacity remains at a very high level."
Consumer associations including carmakers' group ACEA and WindEurope say an extension would be unjustifiable given recent declines in import levels and skyrocketing steel prices, adding layers of uncertainty and volatility to an already nervous EU steel market.
"A WTO Member shall apply safeguard measures only for such period of time as may be necessary to prevent or remedy serious injury and to facilitate adjustment," according to the Agreement on Safeguards on the WTO website. "The period shall not exceed four years." Extension – up to a total maximum of eight years' duration - can be made only if products are "imported in such increased quantities, absolute or relative to domestic production" as to cause a "significant overall impairment in the position of a domestic industry that produces like or directly competitive products."
Source : https://www.spglobal.com/platts/en/market-insights/latest-news