'Crucial' talks on EU steel tariffs coming up
It is “crucial” that the UK receives its own allocations in the European Union’s new steel quotas, a leading industry figure has said.
Next week, the EU’s international trade committee is set to meet to discuss some of the specifics around the steel tariffs that are set to be introduced on July 1.
Last year, the European Commission announced plans to impose 50 per cent tariffs on steel, double the current level of 25 per cent, while cutting tariff-free import volumes to 18.3 million tons a year – a 47 per cent reduction.
This was a huge blow to the British steel industry, which has already been hit by levies on steel into the American market.
The Community Union, which represents workers at British Steel in Scunthorpe, described it as an “existential threat”.
Next week, the international trade committee will decide on “melt and pour” rules, which track the origin of the steel back to where it was first made.
This could have a big impact on UK businesses, as British Steel is the only plant in the UK that can make virgin steel.
Peter Brennan, director of trade at UK Steel, said: “It is crucial that the UK receives specific allocations in the EU quotas.
“If we are lumped into a residual quota, we will likely be squeezed out by large volumes of subsidised, commodity steel grades, damaging our export ability.”
Philippe Heeren, a Brussels-based regulatory partner at Reed Smith LLP, said that next week’s discussion “will be critical and we expect the EU institutions to reach a political agreement”.
“Under the current EU steel safeguard, the UK benefits from a country-specific quota allocation for certain product categories,” he explained.
“It is not certain that the UK will maintain a country-specific quota allocation under the new measures, and if so, whether that country-specific quota allocation will be available from 1 July.
““The proposed ‘melt-and-pour’ requirement could pose a specific risk for UK exporters, if country-specific quota eligibility is determined on that basis.
“UK-manufactured steel products from imported materials that were originally melted and poured in another country may not qualify for a UK-specific quota.”
Ahead of the talks last month, Trade Minister Chris Bryant visited Brussels to put forward Britain’s case.
A Government spokesperson said: “We are speaking regularly with the EU on steel tariffs and are working to find a solution that protects vital steel trade between us.
“We have made clear that restricting access to the EU market would disrupt key supply chains and harm both our industries, and we are working at pace to ensure the best outcomes to protect the UK.”