AN EU TRADE POLICY THAT WORKS FOR INDUSTRIAL RESILIENCE

Worsening global steel excess capacity – according to the OECD at over 550 million tonnes, four times more than annual EU steel production – is an existential threat to the sustainability of the European steel industry. In addition to China, excess capacity is now also proliferating in Southeast Asia, North Africa and the Middle East, and is expected to significantly increase over the next three years.

This overcapacity is undermining the viability of the EU steel sector in two ways. Firstly, China is massively exporting steel worldwide at prices below the cost of production, which is severely depressing prices. Secondly, these exports are forcing other regions to divert steel to the EU market. In addition to China, new sources of excess capacity are being build up, notably in North Africa, the Middle East and the ASEAN region. Steel excess capacity is now a truly global crisis.

In addition, many third countries are protecting their own domestic markets against steel imports, including the US which has put in place section 232 tariffs for steel products. These tariffs, which are not in line with WTO rules, have been replaced with tariff rate quotas for the EU, however, they continue to significantly affect EU producers.

Should we fail to address this spill-over, more EU steel capacities will be idled, with the threat of permanent closures becoming more real by the day. This would result in thousands of job losses affecting not only direct jobs but also indirect jobs due to the impact on the supply chain. Moreover, the EU steel industry would lack the financial capacity to invest in its green transition to contribute to the EU’s and global climate objectives. We cannot allow the EU to become a steel processing region only, the EU must be able to make primary and secondary steel! 



The signatories call on the European Commission and Member States to:


 Urgently strengthen and ensure assertive enforcement of the EU Trade Defense Instruments – anti-dumping, anti-subsidy and safeguards tools - to stop unfair trade practices and circumvention in the short-term.

Adopt a structural solution to comprehensively stop the spill-over impact of the persisting and worsening global excess capacity, replacing the current steel safeguards, which end in 2026, with a more robust tariffication regime and measures taking into account WTO rules.

Conclude an international agreement for sustainable steel in line with CBAM and in full compliance with WTO rules.  

 

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