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European Union

Dáil Éireann Debate, Tuesday - 22 March 2022

Tuesday, 22 March 2022

Questions (96)

Seán Sherlock

Question:

96. Deputy Sean Sherlock asked the Tánaiste and Minister for Enterprise, Trade and Employment if discussions are being held at European Union level to ensure security of supply of steel products from third countries in which no sanctions apply but for which tariffs apply. [15008/22]

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Written answers

As the Deputy will be aware, the European Union imposed Safeguard Measures on steel imports into the EU in July 2018 in response to the United States applying a 25% tariff on steel imports originating from 3rd Countries, including the European Union. As a result of the US Measures, there was an increased risk of steel originally destined for the US market being diverted to the EU and thereby distorting the EU steel market.

To address this risk, the EU introduced Steel Safeguards Measures in 2018 for an initial period of 3 years. These measures were extended following a review of the mechanism in June 2021. The decision to continue the measures for a minimum period of 2 years was based on a Commission-led review which recommended the prolongation of the measures in order to defend the Single Market against 3rd country steel flooding the market, which could potentially injure EU steel producers across the Union.

The current Safeguard Measures allow for the importation of steel from 3rd Countries by way of quotas, determined in line with traditional volumes of trade in steel before the Safeguard tariff is applied.  Thus, traditional trade flows should not be impacted by the ongoing Measures.

Additionally, as of the 1st January of this year a quota-based system on exports of EU steel and aluminium into the US was implemented in place of the 2018 tariffs on all such imports. This system allows all EU Member States to export steel and aluminium products to the US - within traditional trade volumes - without attracting the additional 25% tariff. In response, the EU suspended its rebalancing countermeasures against the US that were imposed in 2018, these rebalancing measures are separate to the Steel Safeguard measures that continue to be applied to third county imports. These joint actions are welcomed but are considered to be incremental steps in finding a permanent solution to the issue of trade in steel and aluminium between the EU and US.

As the Deputy will know on the 24 February 2022, the Russian Federation commenced a large scale military invasion of Ukraine. As one element of its response, the European Union implemented an import ban on steel products originating in the Russian Federation and Belarus and this action was taken due to the unacceptable and illegal Russian military aggression against Ukraine.

In light of these developments, the EU Commission recognised that its Safeguard Measures needed to be recalibrated to take into account changed internal market dynamics due to the ban of imports of steel and aluminium products from the Russian Federation and Belarus.

Therefore, the EU Commission proposed to Member States to adjust the functioning of the EU Safeguard measures to ensure that these import bans do not create a shortage of supply in the Union and that Union steel users can continue to source those volumes from other third country sources.

The proposals themselves aimed to proportionately redistribute the quota volumes allocated to both countries among other exporting third countries based on the most recent data available to the EU Commission, the overall share of imports from 2021. This approach by the EU is also in line with the logic of the functioning of the measure, as it preserves traditional trade flows in terms of volumes and origins, adapted to the current exceptional circumstances.

This proposal has been formally adopted by the European Union and came into force as of 16th March 2022.

Officials in my Department continue to engage with Irish industry and representative groups and liaise closely with EU officials regarding the operation of the safeguard measures to ensure that they continue to meet their objective in guarding EU steel producers from the harmful impact of trade diversion of steel while at the same time ensuring that the EU market stays open to fair and sustainable competition where EU importers can secure supply at competitive prices.  

As always, steel sourced within the EU is not subject to any such tariffs as part of the Single Market.

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