EU steel tariff extension: India may strike back

Amiti Sen New Delhi | Updated on October 28, 2021

India estimated that safeguard measures led to decline in exports of €1.168 billion on which duty collection would be €292.01 m   -  REUTERS

Russia, Turkey too notify their intent to suspend concessions against EU safeguard action

The spat between India and the EU over the bloc’s decision to extend safeguard duties on steel imports from the country for three more years has intensified with New Delhi confirming its intention to impose retaliatory duties on imports from EU countries after Brussels justified its action at a recent WTO meet .

At a recent meeting of the WTO Safeguards Committee, India said that it will provide the details of the suspended concession, estimated at € 292 million, to the WTO’s Goods Council before the tariff increase is applied, a Geneva-based trade official told BusinessLine.

Russia and Turkey too have notified the WTO of their intent to suspend concessions against the EU for its decision to prolong the safeguard measure.

EU’s tariff rate quotas

The EU had implemented tariff rate quotas on steel imports as a safeguard measure in 2018 for three years following the US decision to impose additional import duties on steel from a number of countries including Russia, India and Turkey.

It fixed specific quotas for steel imports for exporting countries beyond which the items attracted additional import duties of 25 per cent.

The situation became tougher for Indian exporters after the EU made certain changes in the TRQ administration and then decided to extend the measures for another three years.

“One of the reasons behind the EU’s decision to impose TRQs on steel was to avoid diversion of exports from the US to the EU market. But this has caused losses for Indian exporters due to no fault of theirs. That is why India wants to impose retaliatory duties in case the EU does not roll back its decision,” another official said. India is among the main steel exporters to the EU, which also includes China, Russia, South Korea, Turkey and Ukraine.

In talks with Brussels

India estimated that the safeguard measures resulted in the decline of exports to the tune of €1.168 billion on which the duty collection would be €292.01 million. New Delhi held consultations with Brussels trying to persuade it to withdraw the measures, but the latter has not agreed yet. The retaliatory action being planned by India, Russia and Turkey are being taken in line with Article 8.2 of the Safeguards Agreement, which allows a member to suspend concessions if an agreement on compensation with the member imposing the safeguard cannot be reached.

The right to suspend concessions can only be exercised three years after the safeguard is in place.

Standing firm on its decision to extend the safeguard beyond the original three years, the EU, said that it had carried out an investigation which found that the relevant criteria under the WTO’s Safeguard Agreement for an extension were all met.

Published on October 28, 2021

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