EU seeks US tariff-rate quota management improvement

The EU is pushing the US for a “noticeable improvement” in its management of tariff-rate quotas (TRQs), which the EU considers “rigid”, European Commission vice president Valdis Dombrovskis said on Monday of the progress made in Global Arrangement on Sustainable Steel and Aluminium (GASSA) negotiations.

The comments came following an EU Trade Council meeting, the outcome of which European steelmakers’ association Eurofer criticised for showing there is still a gulf between the EU and US positions.

The two sides failed to reach a deal on GASSA in time for the EU-US summit in Washington last month and subsequently extended the deadline for negotiations till year-end (see Kallanish passim).

The main stumbling block was the “unwillingness of the US side to provide a clear pathway towards definitely withdrawing the 232 tariff-rate quotas which the US is currently imposing on EU exports,” Dombrovskis commented during Monday’s press conference.

While negotiations continue, the sides “need to manage the situation” approaching on 1 January, which would see US Section 232 tariffs and EU retaliatory measures come back into force if no agreement is reached.

“We are in an asymmetric situation where we [EU] have completely suspended our measures but the US still continues to impose if not tariffs, then tariff-rate quotas; but also the management of TRQs is quite rigid and certainly can be improved,” Dombrovskis noted.

The main discussion now is on improving the TRQ management before the EU side decides on the next steps, he concluded.

Eurofer called the meeting a missed opportunity to settle the trade dispute before the COP28 summit in Abu Dhabi beginning on Thursday.

“Without a carbon-neutral industry at global scale, it will be impossible to achieve the 1.5 nor the 2 degrees Celsius objective in 2050. An ambitious international binding agreement tackling the existential challenges the steel industry is facing worldwide should not become the collateral damage of different views across the Atlantic on the approach to solve the US Section 232 issue while we share the same values,” says Eurofer director general Axel Eggert.

The absence of a GASSA deal “risks jeopardising the European steel industry’s decarbonisation efforts and shows the limits of EU global climate and trade diplomacy”, he adds.

“We urge the EU and the US to find a common path forward, positively conclude the negotiations, and avoid postponing solutions for global challenges,” Eggert concludes.

Adam Smith Poland