UK agrees steel quota access with EU under new trade protections
Details and Implications of the New UK-EU Steel Trade Protections
Background and Motivation for Trade Protections
LONDON, June 25 (Reuters) - Britain on Thursday confirmed details of new steel trade protections due to take effect on July 1, saying it had agreed quota access with the European Union to limit the impact on its biggest trading partner.
Britain and the EU have both moved to protect domestic steel producers, citing concerns over the "dumping" of highly subsidised steel from countries such as China, and have held talks to ensure their measures do not adversely affect each other.
Quota Arrangements and Reciprocal Access
Britain said on Tuesday the EU would have tariff-free quotas across multiple steel product categories, including 375,000 metric tons a year for some flat steel products, and that the bloc would offer reciprocal access for British steel.
Trade minister Chris Bryant said Britain had "engaged closely with the bloc" and the measures would "provide stability for UK-EU steel trade".
Commitment to International Obligations
"We recognise that this will create changes to trade flows including with some of our closest trading partners," he said. "We want to reassure them that the UK remains committed to our international obligations and to constructive engagement on our steel measure."
Challenges Facing UK Steelmakers
Steelmakers have struggled to survive in the birthplace of the Industrial Revolution after decades of decline driven by deindustrialisation and, more recently, high energy costs and a global glut of cheap steel.
Ministers have warned of an existential threat to Britain's steel industry unless protections are renewed and enhanced.
Specifics of the New Measures
Quota Reductions and Tariff Adjustments
Setting out final details of the measure, first announced in March to replace a safeguard that expires on June 30, Britain said imports allowed under tariff-free quotas would be cut by 51%, rather than the 60% previously proposed.
Imports above the quota will face a 50% tariff, up from 25%. Bryant said the overall quota volume would be about 3.2 million tons, around 21% higher than previously proposed.
The changes will take effect next month.
Comparison with EU and U.S. Tariffs
The EU and the U.S. have also raised tariffs on steel outside quotas to 50%, though Britain has secured a lower U.S. tariff of 25%.
International Reactions
India's Response
India had voiced concern over Britain's new steel measures, but has since said it has been reassured as the countries prepare to implement a free trade deal.
Reporting Credits
(Reporting by Sam Tabahriti and Alistair Smout. Editing by William James and Mark Potter)