A Flood of new Trade Restrictions followed the last G20

The last G20 meeting was held on 15th November. At that meeting delegates pledged to resist protectionism. Almost immediately on their return to their capitals G20 countries, producing 56% of global steel (66% if you exclude the EU steel production), took protectionist actions (see attached documents).

Recent steel-specific government measures provide graphic evidence of intense protectionism in steel markets outside the EU as the economic crisis deepens.

“We have witnessed an explosion of steel trade restrictive and distortive measures by virtually all of our major trading partners over the last months in response to contracting global steel demand”, explains Gordon Moffat, EUROFER Director General. Most disruptive are new export incentives aiming at exporting the way out of the domestic steel crisis instead of effectively addressing issues such as excess capacities fuelled by massive subsidization, in countries such as China”, adds Gordon Moffat.

Domestic steel support measures include a wide range of import barriers and export incentives restricting and potentially distorting steel trade flows:

• Applied steel import tariffs have been increased (India, Russia, Turkey, Egypt, Indonesia, Vietnam)
• Automatic steel import licensing has been made restrictive through additional administrative control and delay, and inspection tightened with additional cost burden for import business (India, Malaysia, Thailand)
• Mandatory standard certification requirements (India, Indonesia, Malaysia)
• Intensifying steel product-specific use of fiscal export incentives by increasing export VAT rebates and zeroing of export taxes (China)
• “Buy national steel” clauses (USA, Iran)

“Pressure from the combined effect of this unprecedented proliferation of steel trade restrictions is building up and will unavoidably trigger massive diversion of steel towards the EU market once demand picks up”, warns the EUROFER Director General.

“At a time when EU steel producers are continuing individually to take drastic measures to bring output into line with demand, we call on the Commission and the member states to take vigorous action to secure open markets. In particular, the upcoming G20 summit should make a real commitment against protectionism by adopting a stand-still and transparency covering any measure with potential direct or indirect trade restrictive or distortive effect, whether or not it is within WTO limits”, concludes Gordon Moffat.

Represented by EUROFER, the European steel industry is the world leader in its sector with a turnover of over EUR 160 billion and direct employment of 440 thousand people, producing over 200 million tons of steel per year.

Contact

Gordon Moffat, Director General +32 2 738 79 26 (g.moffat@eurofer.be)

Axel Eggert, Director Public Affairs +32 2 738 79 34 (a.eggert@eurofer.be)