LONDON, Jan. 16, 2019 /PRNewswire/ --
The European Commission (EC) has proposed the form and extent of its final safeguard measures, though they remain subject to possible change prior to implementation. Here we outline the structure of what is currently proposed and consider what it might mean from several perspectives.
Europe proposes its final steel safeguard measures
At the end of last week, the EC officially notified the WTO of its intention to impose final safeguard measures on steel imports, and of the proposed form of those measures. The official release can be found here.
Quota structure to be more complex
All steel products subject to provisional measures would be subject to the final measures. They take the form of a set of tariff-rate quotas, similarly to the provisional measures, based on the average volume of imports over 2015-17 plus 5%. Once the quota is exceeded, further material can be imported but a tariff of 25% will apply. In the event that antidumping measures already exist for certain products and countries, only the higher rate will be paid.
The quotas will run for three specified time periods. The first period will run from 2 February until 30 June this year and be followed by two annual periods ending 30 June 2020 and 2021. The available quota volume will increase by 5% each period.
The quota for HR coil is global, while the quotas for all other products are set on a country-by-country and product-by-product basis for selected large exporting countries. These country-specific quotas apply for the entire specified time periods.
All other countries are assigned to a product specific, "residual quota" pool. In contrast to the country specific quotas, this residual quota is divided into four equal calendar quarters - so the first quarterly quota will end on 31 March this year and be pro-rated accordingly. Unused quota volume can be rolled forward to the following quarter. If volume remains in this residual quota then in the last quarter of each tariff period (i.e. during calendar Q2 of each year), the exporters with their country specific quotas can also access the remaining residual quota should they have exhausted their own.
CRU understands that it is possible that any unused quota from the provisional safeguard period will be rolled forward into the final safeguards. The mechanism for this remains unclear since the provisional quotas did not contain per-country elements.
Self-proclaimed World Trade Organisation "developing countries" with an import share less than 3% during the reference period of 2015-17 for a specific product are exempt from the quotas for that product.
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