Section 232, unused quotas justify safeguard extension: Federacciai

Italian producers’ association Federacciai has spoken in favour of the European Commission (EC) proposal to extend safeguard duties for three years beyond their expiry date of 30 June.

The association concedes the pandemic and strong recovery stimuli from all governments have created imbalanced supply and demand, and considerable price increases. However, it adds in a note sent to Kallanish: “The extension of the safeguard measures proposed by the European Commission is due to the persistence of the distortive protectionist measure raised by the United States, and cancelling these measures now would be irresponsible.”

The association argues that none of the existing product import quotas have been exhausted since the beginning of the year. This proves, it says, the European safeguard action has not prevented the free import of steel products in this phase of economic recovery.

Italian trade association Assofermet, together with the European Automobile Manufacturers’ Association (ACEA), have expressed a very different opinion. Assofermet believes the safeguard should be scrapped as it will impair the economic rebound from the impact of the Covid-19 pandemic. It will also exacerbate steel shortages, which are causing a slowdown in the downstream steel value chain, as well as the entire economy. ACEA said the move disregards the interests of downstream users of steel amid acute automotive steel shortages (see Kallanish passim).

The EC has notified parties to the investigation as well as the WTO of its intention to prolong steel safeguard measures. The proposal must be voted on and confirmed by EU member states; it is nevertheless not expected that significant changes will be made to the final measures. According to the EC proposal, a relaxation of tariff-free quotas by 3% annually would be implemented during the 2021-2024 period. Consultations on the proposal are taking place between 14 and 18 June.

Natalia Capra France