Evolution of international trade in the steel sector
In August, we reported that the new Trade Remedies Authority (TRA) had recommended maintaining safeguards on just 10 of the 19 categories of steel products, in line with its post-Brexit transitional review. The recommendation, if accepted by the Secretary of State for International Trade (the Minister for Trade), would result in the importation of certain wire rod, stainless steel bar, tinned products and certain railway materials into the United Kingdom duty-free. rights. However, the Minister of Commerce (then Liz Truss) circumvented the rules governing the recommendations made by the TRA in order to retain the safeguard measures for five of the nine categories for which the TRA recommended the removal of the safeguard.
The trade minister’s decision was arguably prompted by significant pressure on the UK government from the local steel industry, which made their concerns over the TRA recommendation very clear. Now it appears that TRA may be acting on some pressure that it too is facing. On September 7, the TRA launched a review of its recommendation to the Minister for Trade, following review requests submitted by domestic steel producers as well as UK importers and downstream manufacturers. Unsurprisingly, the domestic steel industry insists that the original TRA recommendation should have extended the safeguards to more steel products, while importers and manufacturers argue that safeguard measures for various categories would have had to be deleted.
The review process allows affected parties to make further comments about a decision, even after it has been made. The reviews cover the same mandate as the original transition review, but with the notable addition of additional information submitted by interested parties. At the end of the process, the TRA will make a reconsidered decision, under which it will modify or maintain its original recommendation.
TRA’s decision to reconsider its original recommendation fuels critics’ opinion that Britain’s post-Brexit trade remedy system is not fit for purpose. It also arguably reflects not only the pressure exerted on the UK government by industry, but also by John Healey of the Labor Party, the shadow Secretary of State for Defense, who criticized the original TRA recommendation as ” leading Britain in the wrong direction â.
With the role of Minister of Commerce since she was taken over by Anne-Marie Trevelyan, and as part of Prime Minister Boris Johnson’s cabinet reshuffle, it will be interesting to see if Ms Trevelyan gives more deference to the TRA than his predecessor.
The European Commission (Commission) is also facing pressure from local steel producers who have expressed concern over the EU’s proposed plan to temporarily suspend specific anti-dumping duties due to market distortions resulting from the Covid-19 pandemic. The basic EU anti-dumping regulation allows the Commission to suspend anti-dumping duties for up to one year, provided market conditions have temporarily changed (e.g. due to exceptional supply chain disruptions) to a such an injury to the domestic industry is unlikely to resume as a result of the suspension. The Commission has reviewed a small number of candidate anti-dumping measures (including those on certain stainless steel products) for suspension, and two of these reviews have been concluded to date: the Commission has suspended anti-dumping measures on imports flat products – rolled aluminum products from China – a first for over a decade (and along with their imposition, which is exceptional in EU trade remedy practice). The Commission has, however, decided not to suspend measures on Russian plywood imports – a signal that the Commission may wish to maintain the rare and exceptional nature of such a suspension.
The Commission is also facing complaints that the proposed EU tax on imports of polluting industrial products does not cover enough sectors. The Carbon Border Adjustment Mechanism (CBAM) project is part of the EU’s climate change strategy and aims to prevent the risk of carbon leakage while maintaining WTO compliance. CBAM will require EU importers to purchase carbon certificates corresponding to the carbon price that would have been paid if the goods had been produced in accordance with EU carbon pricing rules.
The European Parliament called for a comprehensive policy earlier this year, which would cover all industrial sectors covered by the EU emissions trading session. Notwithstanding this orientation, the Commission has decided to limit the CBAM to just five sectors: cement, steel, aluminum, fertilizers and electricity. This narrow approach has drawn criticism from a number of lawmakers in Parliament’s Environment Committee. The lack of export rebates has also drawn criticism, but the possibility that export rebates look like subsidies in violation of WTO law makes their absence more understandable.
In conclusion, although things may look slightly more positive for UK steel producers in the international trading space, their European counterparts will undoubtedly remain concerned about the potential suspension of anti-dumping duties by the Commission while simultaneously benefiting from the inclusion of steel in the CBAM by the Commission. .