The European Commission has notified the World Trade Organization that it proposes to introduce definitive tariff-rate quotas on a country-specific basis on the biggest steel-supplying countries, exempting hot-rolled coil imports, which would receive a global tariff-rate quota under the plan, according to an EC notification document obtained by S&P Global Platts.
The safeguard measures are intended to be in place for three years -- including the period of provisional safeguards that started in July 2018 -- expiring July 16, 2021. Once the quota has been reached, a 25% duty would apply, the document stated.
The level of the tariff-rate quota should be increased by 5% in each year the measures are in force. The EC considers that the quantitative level of the tariff-rate quota should be based on the average imports in the period 2015-2017 plus 5%.
When a country with "significant supplying interest" has exhausted its specific tariff-rate quota, it should be allowed to have access to the quarterly global tariff-rate quota for the specific steel product that would apply to all other countries, but only in the last quarter.
"This residual [global] tariff-rate quota will be divided quarterly in order to ensure that imports are evenly distributed over the year. Unused quarterly tariff-rate quota allocations would also be automatically transferred to the next period," the EC said.
In the case of HRC, the EC said a country-specific approach would not be appropriate as 60% of imports are already covered by antidumping measures.
The EC set out the following volumes for HRC: from February 2 to June 30, 2019, 3.36 million mt can be imported; from July 1 to June 30, 2020, 8.64 million mt can be imported; and from July 1, 2020, to June 30, 2021, 9.07 million mt can be imported.
Interested parties can consult the EC from January 7-11. It is not clear if the proposal could be further amended.
The definitive safeguard measures will be enforced no later than February 4.
The EC said that for every month in 2018, EU import volumes were higher than import volumes in 2017 and only saw a less pronounced level in August and September 2018, "possibly in view of the provisional safeguard measures that were imposed on 18 July 2018."
