The government said it will swiftly announce emergency measures to respond to the European Union's reduction of tariff-free steel import volumes. Korea's tariff-free quota reduction of 19.7% is relatively favorable compared with competing nations, but the industry has voiced concerns that the EU's protectionist measures could have significant repercussions, including oversupply in the global steel market.
Kim Jung-kwan, Minister of Trade, Industry and Energy, held an emergency meeting with the steel industry Monday at the Korea Trade Insurance Corporation in Jongno-gu, Seoul, to review the impact of the EU's new steel measures on specific product categories and individual companies. "The government will launch a trade grievance response team together with related organizations such as the Korea Iron & Steel Association, the Korea International Trade Association, and KOTRA," Kim said. "We will provide support including guidance on the system, responses to shipping and customs clearance, and consultations on local difficulties, and for necessary matters, the minister will directly consult with the EU to actively respond to minimize damage to companies."
The government also plans to support the industry by creating domestic demand exceeding 510,000 tons, the amount of Korea's quota reduction. "We will support the establishment of a stable cooperative relationship through a voluntary win-win agreement between the shipbuilding industry and the steel industry," Kim said. "We will also expand the use of high-quality steel materials in the renewable energy sector, where large-scale new demand is expected to arise, and establish a new cooperation platform between the defense industry and the steel industry." Responses to unfair trade will also be strengthened. To prevent detour imports through third countries, the submission of information on the crude steel-producing country will be made mandatory, and management of bonded factories will be reinforced.
Effective the same day, the EU is reducing its annual tariff-free quota from the existing 33.82 million tons to 18.35 million tons, a cut of about 46%, and applying a 50% tariff—double the current 25%—on import volumes exceeding the quota.
The Korean government secured a dedicated tariff-free quota of 2.073 million tons through negotiations with the EU. This represents a reduction of about 19.7% (approximately 510,000 tons) from the previous 2.58 million tons. While it is assessed as having been defended compared with the overall EU tariff-free quota reduction rate, the burden on domestic companies could grow as the conditions for steel exports to the EU, a key market, change. However, Korean companies can additionally access a shared quota of 1.735 million tons. The shared quota is a volume that multiple countries can compete for.
