UK amends final safeguard extension proposal

The UK Trade Remedies Authority (TRA) has published its final recommendation on steel safeguard measures. As in the preliminary decision last month, ten products are proposed to see safeguard measures extended for a further three years, with nine slated to be revoked. However, the composition of the products has changed.

UK trade secretary Liz Truss will now decide whether to accept the TRA’s recommendation or to reject it. The current measures expire on 30 June, Kallanish notes.

Categories recommended for extension represented 37% by volume – around 3.9 million tonnes – of average UK steel and iron imports between 2017 and 2019.

The nine products to be revoked represented 18% or 1.9mt of imports. For eight of them, there was no major increase in imports. On stainless steel rod, TRA received evidence a safeguard continuation would hinder the growth of downstream industries which use these products and would face increased costs if imports exceeded the allocated quota. The only known UK producer of stainless wire rod is supportive of the measure being revoked for this reason, TRA says. The initial recommendation to extend the measure was therefore reversed.

Category 25 – large welded tubes, used among other things for offshore wind-farms and in the energy sector – was originally set to be revoked. Having assessed further comments and evidence on this category, TRA has recommended it should now be extended.

TRA also recommended liberalisation of the measure by 3% per year over the three years, increasing the levels of each of the allocated Tariff Rate Quotas. This will ensure the measure balances the needs of UK steel producers and those who use steel products, the authority observes. At the end of the three-year extension, the TRA would consider whether another extension review is necessary.

TRA’s proposal received numerous objections from foreign governments. South Korea said the extension of safeguards by the UK violates the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO Agreement on Safeguards. The UK should immediately terminate safeguards, it added, or, in the case of extending them, only do so for one year.

Turkey also said the extension violates GATT 1994 and the WTO agreement, as well as “relevant WTO jurisprudence due the lack of … prerequisites of a safeguard measure”.

Switzerland meanwhile said transitioning the EU safeguard measures “without prior investigation, notification and adequate opportunity for prior consultations is inconsistent with the United Kingdom’s obligations under the new Trade Agreement between Switzerland and the United Kingdom”.

Brazil added that measures should be immediately terminated, and their extension “could entail suspensions of concessions to the trade of the UK by all Members adversely affected by the measure”.

Adam Smith Germany