UK’s post-Brexit steel safeguard measures to echo EU scheme

The UK will have its own steel import safeguards measures from Jan. 1, 2021, similar to those already put in place by the European Commission, according to a document released by the UK Department for International (DIT) trade on Sept 30. The new import quota rules mirror those of the EC insofar as they will be quarterly and on a country-by-country basis, but according to market sources they are a bit confusing as important issues have not been addressed in the document. The document does not specify for example what the quotas will be and is not clear yet also whether or not quotas will be allocated to products originating from the EU and if the EU be treated as one ‘country’ or as 27 individual countries.

As in the EC measures, the new UK measures stipulate that where the relevant quota is exhausted for a specific country, imports from that country can access the residual tariff-rate quota for the same product category. This provision shall only apply during the last quarter of each year of application of the definitive tariff-rate quota.

The EU based its quotas on average imports for the period from 2015 to 2017, and this is also expected to be the case for the UK quotas: however, this was not specified by the government document neither.

ISTA, the UK trade steel association, said it is seeking clarification on the above issues and has expressed concerns that the volumes could not be enough to supply the UK demand and said that it would have preferred a system of global rather than quarterly quotas.

ISTA also said that some products specifically for the UK will be tight, in particular reinforcing bar, organic coated, galvanised steel, hot rolled plate, hot rolled that are mainly from China and that are currently under dumping duties that are expected to stay in place. But again if the dumping duties will stay in place or not is not clear neither.

As uncertainty can threat imports, ISTA has asked the UK government also to put in place a “shipping clause”, similar to the one already in place in the EU , in which if materials is on its way, should be not be attributed to the tariff quotas, or subject to the additional duty specified. “We reiterate that import transactions can take some five months to fulfil from initial inquiries to final delivery. As a result, some commitments have already been made and it is necessary to continue to sign contracts now – even though UK quota levels are unknown – for deliveries in period one 2021. To assist the steel business and end-users with regard to deliveries after 1st January 2021, we urge the Government to confirm that a ‘shipping clause’ will be applied when the new UK quotas are introduced,” Brian Paterson, ISTA Chairman, stated in a letter send to Simon Walker, Chair-designate Department for lnternational Trade and seen by S&P Global Platts.

— Annalisa Villa