European Commission Investigation into Imports of Steel Products

We would like to share with you the contents of a letter sent by ISTA to the Rt. Hon. Greg Hands MP, Minister of State for International Trade, concerning the European Commission investigation into imports of steel products.

European Commission Investigation into Imports of Steel Products

ISTA are a Trade association based in the UK representing companies in the UK and the rest of Europe involved with the importation of steel products from both inside and outside the EU. Our members are Steel traders, including the trading arm of some EU mills, Independent Service Centres, Independent Steel fabricators, all ultimately supplying British and European industry, as well as Ports, shipping and logistics companies who all depend on steel to be supplied from both inside and outside the EU. By Independent Steel Service Centres and Steel fabricators, we refer to those that are not owned by EU Steel Manufacturers.
ISTA members are greatly concerned with the EU Commission’s recent announcement of a notice of initiation of a safeguard investigation concerning imports of steel products and feel that the effect of this notice cannot have been given sufficient prior consideration. This investigation affects the import of most steel products in to the EU from outside of the EU.
The effect of this announcement is instantaneous and devastating.
We are informed by the EU Commission that provisional measures could be taken anything between one and five months from the initiation of the investigation. These measures could be provisional duties or tariff free quotas, either of which would be devastating. Either importers will have to pay duties which were not previously budgeted for, or it is possible that shipments may be turned away if tariff free quotas are put in place which are subsequently filled prior to the arrival of pre-purchased goods.
It has brought about grave uncertainty for those companies who have already bought and sold material from outside the EU which will be arriving over the coming months and has also paralysed any new business. Members report that, as a result of the uncertainty caused by the investigation, they are unable to enter into new contracts with their overseas suppliers.
Furthermore, there is fear that having been granted tariff free status in the USA, EU steel mills will find that they attract a better price in the USA than in the EU and may export capacity to the USA leaving steel supply in the EU sparse.
Ramifications of this investigation are also of concern. For example, a British port specialising in the handling of steel products from both the EU and from outside the EU, reports that to continue and survive, its business requires steel trading companies to utilise its stevedoring, handling, storing and delivery facilities within the port and the wider community. These services would cease if sufficient steel was not imported into the UK through its facility and, no doubt, others too, leaving a large number of businesses and employees out of work.
Having recently spoken to a member of the EU Commission who is involved in this investigation, they appear to be fully aware of the effect of this action but could only describe our plight as ‘unfortunate’.
We have asked a number of questions directly to the EU Commission, demonstrated below, but we were not able to get any guidance whatsoever from the Commission.
Question 1 – Can you assure us that any material purchased from outside the EU prior to this notice will be exempt from duty or quota restrictions.
Answer: No.
Question 2 – Can we consider that any material arriving in the EU within the next 9 months will be exempt from duty or quota restrictions.
Answer: No
Question 3 – If tariff free quotas are to be introduced, please advise us how they will be calculated, will it be by country of origin? How will these quotas be distributed throughout the EU – will it be by country within the EU?
Answer: Whilst the investigation is ongoing and they are collecting data, they cannot offer any recommendations or guidance.
A further comment was that the EU Commission must balance Union interests – that of steel manufacturers and of institutions representing businesses ‘like ours’.
Whilst we are still gathering our figures, we are aware that there are at least as many, and probably more, people employed in industries in the EU who depend on steel imports than the number employed at steel manufacturing mills.
We are writing to inform you of the consequences of this investigation. Any influence you may have to bring about a quick decision or at least some answers to our questions would be much appreciated.
For your further guidance, we have requested the Commission to withdraw this investigation.
We would be happy to meet you.
Yours sincerely,
Simone Jordan
Chairwoman