The European Union (EU) has submitted three papers on how to reform the work of the World Trade Organization (WTO) as part of a reform process currently continuing within the organization, the European Commission’s Directorate-General for Trade and Economic Security (DG Trade) said in a statement on Tuesday July 15.
The EU is calling for discussions on balancing rights and obligations that reflect today’s global economic realities, updating WTO rules to better address distortive state interventions through greater transparency, stronger discipline and more effective remedies, as well as putting forward ideas for tools and instruments to facilitate decision-making and overcome blockages.
“The EU is determined to work constructively with all WTO members to advance reform and ensure the organization remains strong and capable of supporting an open, rules-based multilateral trading system,” DG Trade said. “With the status quo no longer an option, all major players must assume their responsibility for delivering deep and comprehensive reform.”
In the papers, the EU highlighted how far-reaching state interventions leading to overcapacities and structural market imbalances are increasingly impactful, with negative spillovers on other WTO members. “To ensure fairness, openness needs to come hand in hand with stronger rules ensuring a level playing field,” the EU said in a communication to the WTO on Monday July 13.
These requests came in the context of rising trade tensions between the EU and China in recent months due to the increasing threat posed by the Asian nation to the continental economy and industrial system.
European businesses and institutions are increasingly concerned about overcapacities in several Chinese industrial segments and consequent exports at very low prices into the EU.
According to media reports, the EU Council recently asked the Commission to create new trade instruments to deal with the industrial threat posed by China.
“At the moment there are no proposals on the table, but it’s an issue that is currently being addressed,” a spokesperson at the Council told Fastmarkets on Monday June 29.
The issue is particularly relevant for the European pulp and paper (P&P) industry, especially when it comes to the cartonboard, tissue and woodfree paper segments, which see more and more imports of paper from China and other countries, including Indonesia and Turkey, at very low prices.
In recent months, European P&P industry association Cepi raised concerns regarding unfair trade practices and also joined AEGIS Europe, an industry alliance with over 25 European manufacturing associations, to call for stronger trade defense instruments.
“We have to be more vocal about trade defense instruments,” Bernard Lombard, Cepi’s director of trade and industrial policy, said during a press briefing on Thursday July 2.
The issue is also particularly relevant to the European aluminium industry, where concerns about low-priced imports, the competitiveness of domestic manufacturing and supply-chain security have become increasingly prominent.
Recent disruptions in the Middle East highlighted the bloc’s reliance on external suppliers, with Europe previously sourcing around 20% of its primary aluminium imports from the region. At the same time, the European market continues to receive significant volumes of lower-priced imported aluminium.
Industry association European Aluminium has called for stronger trade measures to support the sector. On June 25, the association urged the European Commission to include an indirect ban on Russian aluminium in the EU’s next sanctions package, arguing that Russia-origin metal continues to enter the bloc through third countries such as Turkey and China at discounted prices.
The issue comes as Europe seeks to rebuild domestic aluminium production capacity. Slovalco, the Slovak aluminium producer jointly owned by Norway’s Hydro and domestic group Penta Investments, announced on Tuesday July 1 that it will restart the first 75,000 tonnes per year of its 175,000 tonnes-per-year primary aluminium capacity from the fourth quarter of 2026. Meanwhile, Alcoa’s San Ciprián smelter in Spain has returned to near-full production after curtailments linked to high energy costs.
The European steel industry might also benefit from possible improvements in the WTO rules.
Between 2025 and 2026, the EU has been taking stronger measures to protect its domestic steel industry, which has faced growing pressure from lower-priced steel imports in recent years, largely originating from Asia.
A major turning point came in 2018, when the US imposed 25% tariffs on most imported steel under Section 232, prompting a redirection of steel volumes originally destined for the US market toward Europe, increasing pressure on local producers. In response, the EU introduced steel safeguard measures, which have remained in place since 2018.
While steel demand showed signs of recovery in 2025, crude steel production in the EU fell to a record low of 125.8 million tonnes in the same year, according to a report from the European steel association, EUROFER, published in early June 2026. Imports continued to gain market share, prompting the use of tighter trade measures, the association said.
In response to this trend, the European Commission decided to extend its steel safeguard measures beyond their original expiry date of June 30, 2026, and unveiled a new import quota regime on the same day, just ahead of its entry into force on July 1.
Under the revised system, the Commission significantly reduced tariff-free volumes for finished steel products to 18.3 million tonnes per year, while increasing the out-of-quota import duty to 50% from 25%.
The new framework also introduced a two-tier quota structure, dividing allocations between countries that benefit from an existing or future free-trade agreement (FTA) with the EU and countries covered under the Most Favored Nation (MFN) regime. MFN quotas were allocated according to each country’s average share of EU imports within each product category over the 2022-24 period.
The changes have created significant uncertainty across the European steel market. While some countries, including Turkey, saw their quota volumes reduced by more than 50%, some market participants were questioning the effectiveness of the new regime, describing the measures as another layer of bureaucracy.
