German steel association: EU must provide effective protection against trade diversion

by David Fleschen

The German Steel Federation (Wirtschaftsvereinigung Stahl) has published the following statement on the current EU policy:

Safeguards launched by the EU Commission last year have not been able to protect Europe's steel industry from massive trade diversion as a result of US steel tariffs. "Already last year, steel imports into the EU rose by 11 percent to a new record level of 45 million tons, while in the US they fell by 13 percent," explains Hans Jürgen Kerkhoff President of the German Steel Federation. In addition, inadequately designed country quotas and numerous loopholes undermine the intended protective effect. At the same time, the economic situation in the steel industry had deteriorated considerably.

"The European institutions must now take urgent action to ward off lasting damage from the steel industry in Germany and Europe. The burden of US protectionism should not be dumped on the backs of steel companies in Europe, "Kerkhoff continued.

Against this backdrop, the association president clearly rejects the plans to increase the tariff quotas of the EU safeguard measures: "A further softening of EU steel safeguards would be irresponsible. The planned increase in quotas in July 2019 would completely lose the protective effect of the measures. A further increase in imports would be at the expense of domestic industry as demand falls. "Since 2 February 2019, definitive safeguard measures have been adopted in the EU to protect the EU steel industry from the unfair foreclosure of the US market , As of 1 July 2019, an increase of duty-free quota volumes of five percent is planned. As early as February 2019, with the imposition of definitive measures, tariff quotas were increased by five percent compared to the provisional measures.

The objective should be to remedy the situation in order to ensure effective protection, given the difficult situation. "The Federal Government must urge the European Commission to use the room for maneuver provided by the rules of the World Trade Organization (WTO) in the design of safeguard measures," Kerkhoff demands.
Source: Wirtschaftsvereinigung Stahl, Photo: Fotolia

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