On June 2, 2023, the Committee on Safeguards of the World Trade Organization (WTO) announced that the European Union (EU) would continue to extend its safeguard measure against imported steel in the form of tariff-rate quotas (TRQs) to Vietnam and other countries currently subject to trade remedy measures in related products.
On March 26, 2017, the European Commission (EC) initiated a safeguard investigation against steel products imported into the EU market.
On 18 July 2018, the European Commission decided to apply a provisional safeguard measure to the import of certain steel products classified under 23 product categories for a period of 200 days.
On 2 February 2019, the European Commission imposed a formal safeguard measure on 26 of the 28 product categories under investigation. The out-of-quota tariff rate is 25%, the applicable quota varies depending on the product type and origin.
On July 1, 2020, the non-taxable quota was increased by 5%. This measure is in effect until June 30, 2021.
After the 3-year period, the EU continues to extend this safeguard measure for the first time, but relaxes it by increasing the level of tariff-rate quotas for all groups to 4% for the period from 1 July 2022 to 30 June 2023 and 1 July 2023 to 30 June 2024.
EU extends the application of tariff-rate quotas (safeguard) for 8 groups of steel products of Vietnam
According to the notice of the WTO, the European Commission believes that the domestic industry of all kinds of steel products will continue to suffer serious injury if the safeguard measures are not extended in the context of EU’s domestic steel industry has implemented many adjustment measures with the increase of imported steel products into the market.
Thereby, the EU issued a Decision to extend the safeguard measure applied to imported steel products subject to safeguard duty in the form of tariff-rate quotas, based on the Commission Implementing Regulation (EU) 2021/10291.
The safeguard measure for some imported steel products implemented by the European Commission is mixed between the way of allocating separate quotas for each country and the general quota for the remaining countries. The out-of-quota tariff is 25%.
For Vietnam, enterprises producing steel products, exported to the EU market are subject to a common quota. Specifically, there are 8 product groups including group 1 (hot rolled steel plate); group 3B (electrical engineering steel plate); group 4A, 4B (galvanized steel plate), group 5 (organic coated steel plate), group 9 (stainless cold rolled steel plate), group 25B (large steel pipes); group 26 (other steel pipes).
Vietnam is not subject to safeguard measures against other groups of steel products because the import turnover is less than 3%, which is negligible according to the criteria set for a developing country.
In the next stage, Vietnamese businesses need to cooperate with the competent authorities of the EU and Vietnam, answer the investigation requests, questionnaires, etc. on time and according to the strict requirements of the EU to avoid the case of unfaithful cooperation subject to heavier trade remedies or incomplete information leading to steel products outside the above 8 groups being determined to exceed 3% of the market share, thereby being listed on the list of applicable tariff-rate quotas.
One of the most effective measures in the coming time is that Vietnamese enterprises actively control the amount of steel products exported to the European market, ensuring that the export shipments are in line with the remaining quotas when they are exported with the support and supervision of competent authorities in Vietnam.
Notice can be downloaded here.