Ukraine war makes EU safeguard removal possible: Yuriy Rudyuk

The full repercussions of steel trade redirection following Russia’s invasion of Ukraine remain unknown, with the absence of supply from either country causing intense uncertainty for European steel producers and traders, says Yuriy Rudyuk, an expert in international commercial law and anti-dumping and safeguard matters at law firm Van Bael & Bellis. The main question is over which of the existing EU trade barriers will be confirmed or extended.

At this week’s EUROMETAL Iberia Steel Net Forum in Barcelona attended by Kallanish, Rudyuk said: “Significant volumes of hot-rolled products, exceeding 1.6 million tonnes of Russian-origin steel, were redistributed among countries such as Turkey, India, Korea, the UK and Serbia, while some 300,000t of Russian wire rod and more than 260,000t of Belarus-origin steel was redistributed among such countries as Switzerland, Ukraine, the UK, Turkey and Moldova. This is a major correction of import flows in the EU.”

Rudyuk predicts the EU will soon suspend all tariffs on Ukrainian goods initially for one year, including steel safeguards and anti-dumping duties on hot rolled coil and certain seamless pipe and tube.

The expert pointed out that EU safeguard measures are now increasingly detached from the current business reality of trading in steel. “We are seeing an increase of anti-dumping measures, dramatic disruption or complete halt of supplies from Belarus, Russia and Ukraine in various steel product categories, while other steel supplying countries cannot easily substitute these lost volumes because safeguard measures now work as a major trade barrier for such replacement. As a result, a major change of the application of the safeguard measures would be required,” he explained.

The European Commission is considering three options to ease the situation. The first one, according to Rudyuk, is a major softening of the measures by replacing country-specific tariff-rate quotas with global quotas for certain categories, or increasing the liberalisation rate for all products.

Another measure could be to allow new trade flows to form under the safeguard framework, although this is “difficult in practice as this has to be done in a non-discriminatory manner”.

A further option is to keep the measures without major changes, but only for a relatively short period, while the last possibility is to repeal the measures altogether. “Possibly, for the first time in all previous reviews, we come so close to a repeal in terms of arguments and the economic business reality,” Rudyuk observed.

Todor Kirkov Bulgaria