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Unbelievably, many EU governments have not yet decided to consider the pandemic as mitigating circumstances.
Steel demand has fallen 50% since the start of the COVID-19 pandemic in March. As a result, the European steel industry has cut production sharply to adapt to these changed circumstances, with 40% of the EU steel workforce laid-off or having to work part-time. Meanwhile, countries such as China, India, Indonesia and Russia have not rested: they continued, or are restoring, steel production and stockpiling. The imminent risk of cheap steel offers flooding the market would hamper the European industry''s recovery, claims EUROFER, and the survival of one of Europe’s strategic industries – one that sustains 2.6 million direct and indirect jobs in the EU. The current proposal could massively boost the market share of imports while a huge part of EU production capacity sits idle.
The safeguard review process allows for ‘changed circumstances’ to be addressed, such as those caused by a severely negative impact on the economy and markets as a result of the pandemic.
With this in mind, EUROFER urges the Commission and member states to improve the proposal and turn it into a crisis-oriented review, effectively safeguarding the European steel industry. EUROFER is calling for a tariff-free quota size that reflects actual market conditions and insist that the measures should be adaptable because of ‘changed circumstances’. A lack of interpretation and political, says EUROFER, will only play into the hands of steel exporters to the EU that are heavily supported by their governments.
EUROFER wants import quotas to be considerably reduced, unused quotas transferred to subsequent quarters and access to residual quotas for countries with their own quotas prevented.
"Europe needs a sustainable and resilient steel industry if it wants to deliver on the objectives of the European Green Deal," says EUROFER.
The Green Deal – born before the crisis struck – is predicated on showing that Europe can lead the way to carbon neutrality by 2050. European steel production is far cleaner than that of the countries threatening to flood the EU market with their excess material, claims EUROFER, adding that European steelmakers are leading the way in setting ambitious targets to produce steel in a carbon neutral way.
"If the European steel sector is wiped out by imports, we will simply not be there to lead emissions reductions from the global steel industry," EUROFER said.
A Europe that becomes ‘Green’ because it accepts that other regions undercut us and pollute at will shall not be able to hold its head high. EU trade policy needs to be allowed to shift into crisis mode when European strategic industrial interests are existentially threatened. If climate change leadership is the strategic advantage the EU claims it is, then it must use the tools available to it to reinforce the strategic industries that will make the strategic green transition fair, just and possible.
According to EUROFER, at EU level there are, or have been, slow and feeble trade defence decisions, conflicting legislative objectives, obstructed pro-competitive consolidations of globally-sized producers, and onerous emissions and environmental control targets that are set without a regulatory framework that would allow our industry to remain globally competitive while achieving these objectives.
This crisis requires a serious review that takes into account the world as it is today. The steel safeguard being reviewed was created for the pre-COVID era. Now it needs to be adapted to the post-COVID world.
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