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EU and US agree to start discussions on a Global Arrangement on Sustainable Steel and Aluminium and suspend steel and aluminium trade disputes

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European Commission President von der Leyen and United States President Biden agreed on Sunday to start discussions on a Global Arrangement on Sustainable Steel and Aluminium. This marks a new milestone in the transatlantic relationship, and in EU-US efforts to achieve the decarbonisation of the global steel and aluminium industries in the fight against climate change. The two Presidents also agreed to pause the bilateral World Trade Organization disputes on steel and aluminium. This builds on our recent successes in rebooting the transatlantic trade relationship, such as the launch of the EU-US Trade and Technology Council and the suspension of tariffs in the Boeing-Airbus disputes.

Steel and aluminium manufacturing is one of the highest carbon emission sources globally. For steel and aluminium production and trade to be sustainable, we must address the carbon intensity of the industry, together with problems related to overcapacity. The Global Arrangement will seek to ensure the long-term viability of our industries, encourage low-carbon intensity steel and aluminium production and trade, and restore market-oriented conditions. The arrangement will be open to all like-minded partners to join. Furthermore, following the United States' announcement that they will remove Section 232 tariffs on EU steel and aluminium exports up to past trade volumes, the European Union will take the steps to suspend its rebalancing measures against the United States.

The two sides have also agreed to pause their respective WTO disputes on this issue. European Commission President Ursula von der Leyen said: “The global arrangement will add a powerful new tool in our quest for sustainability, achieving climate neutrality, and ensuring a level playing field for our steel and aluminium industries. Defusing yet another source of tension in the transatlantic trade partnership will help industries on both sides. This is an important milestone for our renewed, forward-looking agenda with the US.”

More information is available in a press release, Q&A and factsheet.

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Economy

Commission continues its action in support of fair trading conditions for #EUSteelProducers

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The Commission has imposed provisional anti-dumping duties on hot-rolled stainless steel coils and sheets from China, Indonesia and Taiwan. The duty rates go from 6% to 18.9% and are set at the level of the dumping margin for Taiwan and at the level of injury margin, i.e. the level necessary to remove economic damage for European producers – in case of exporters from China and Indonesia.

The duties will apply for a maximum period of six months, during which the Commission will continue its investigations and decide whether to impose definitive measures. In parallel, the Commission follows also its anti-subsidy investigation on the same set of products.

The measures adopted today bring the total number of EU trade defence measures on steel up to 55. The Commission continues defending EU companies against unfair trade and competition from abroad adjusting its procedures – in the limit of the EU international obligations under the WTO law – to the current particular circumstances. More information about today's anti-dumping measures can be found in the EU Official Journal.

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Economy

Commission imposes definitive safeguard measures on imports of #SteelProducts

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The European Commission has published a regulation imposing definitive safeguard measures on imports of steel products. The measures took effect on 2 February, and will replace the provisional ones of July 2018 put in place as part of the European Union's response to the decision by the United States to impose tariffs on steel products, a measure that causes a diversion of trade flows into the EU.

The Commission investigation showed that imports of steel products into the EU have been increasing sharply, which seriously threatens EU steelmakers. The definitive safeguard measures published today have been carefully shaped to preserve a continued flow of imports that guarantees effective competition in the European steel market and sufficient choice for the numerous EU users of steel. They are also in full compliance with the WTO rules. The measures concern 26 steel product categories and consist of tariff-rate quotas above which a duty of 25% will apply. The main supplying countries will benefit from individual quotas based on their own historical imports.

For more information please see the full press release and the text of the regulation.

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EU

#SteelExcessCapacity - Global Forum takes important steps to tackle overcapacity

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At the ministerial meeting of the Global Forum on Steel Excess Capacity, held in Paris on 20 September, the world's biggest steel-producing nations agreed to further reduce capacity wherever necessary, avoid that overcapacity is exacerbated in the future, as well as to work to eliminate subsidies which cause overcapacity.

Jobs, Growth, Investment and Competitiveness Vice President Jyrki Katainen, who co-chaired the Paris meeting, said: "This sends a clear message: we will not repeat the costly mistakes of the past, and must tackle excess capacity and its root causes to avoid dire social, economic, trade and political consequences in the future. This will protect growth and jobs in an efficient, sustainable EU steel industry. A lot of work lies ahead though and all members of the Global Forum will have to continue implementing their commitments resolutely and report to G20 Leaders."

Trade Commissioner Cecilia Malmström said: "The global challenge of overcapacity has strained trade relations and the global trade architecture to its breaking point. Progress in this Forum at this sensitive time demonstrates that multilateral cooperation is not only possible, but that it is actually the best tool to tackle global challenges. Putting this agreed package in place is something that the European Union will now follow closely. Our workforce and our industry depend on these commitments being carried out."

The Global Forum is a key body in the fight against persistent global overcapacity in the steel sector. It has already produced tangible results, such as producing reliable and shared statistics on steel production, capacity and excess capacity amongst major steel producers, and starting efforts to cut overcapacity where it is the most needed. This week's commitments build on the engagements made by minister's at their 2017 meeting in Berlin.

The body will finalise its assessment of subsidies leading to overcapacity by the end of the year. In the face of persistent global overcapacity despite recent efforts, the Forum will in 2019 identify further reductions to be undertaken. Finally, the Forum agreed to monitor global capacity increases regularly to stop such a serious case of overcapacity happening again in the future.

Background

The steel sector is a vital industry for the European Union's economy and occupies a central position in global value chains, providing jobs for hundreds of thousands of European citizens.

The global surplus in steelmaking capacity reached around 540 million metric tonnes in 2017 - a drop from 2016 peaks but still the second highest level in history. This has driven down steel prices to unsustainable levels in recent years and had a damaging impact on the steel sector, as well as related industries and jobs.

In March 2016 the Commission issued a Communication presenting a series of measures to support competitiveness of the EU steel industry.

The Commission has acted among others through trade defence, imposing antidumping and anti-subsidy duties, to shield the EU's steel industry from the effects of unfair trade. The EU currently has an unprecedented number of trade defence measures in place targeting unfair imports of steel products, with a total of 53 anti-dumping and anti-subsidy measures. The EU has also activated all legal and political tools at its disposal to fight unjustified US 232 measures.

However, these efforts can only address the effects of global overcapacity on trade — not its root causes. To that effect, the EU participated in the creation in December 2016 of the Global Forum on Steel Excess Capacity. Bringing together 33 economies - all G20 members plus some other interested OECD countries - it includes all the world's major producers.

Since its creation the participating economies have exchanged data on steel capacity, subsidies and other support measures. This increase in transparency has enabled the Global Forum members to focus on the underlying causes of the problem of overcapacity in steel and agree on concrete steps to address them by enhancing the role of the market and changing the structure of the industry.

More information

November 2017 Global Forum package of policy solutions to overcapacity in steel sector

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