EU Asking for Flexibility in Steel TRQs

EU Trade Commissioner Valdis Dombrovskis said he asked American officials this week for more flexibility in how the tariff rate quotas for European steel products are administered. He said that while actions of the Biden administration have "put things, tradewise, on a more positive track," in his view "the current system [for TRQs] seems to be quite rigid."

Dombrovskis, who held a press conference April 22 after a week of meetings in Washington, told International Trade Today he also has questions about how the U.S. is implementing the World Trade Organization decision on its countervailing duties against Spanish olives (see 2111190028).

The TRQs on steel and aluminum are designed to be a temporary measure, as the U.S. and the EU seek to find an arrangement for trade in those metals that protects their markets from overcapacity and creates barriers to dirtier metal production and removes barriers in trade with each other. They have a goal of finding that agreement by October 2023.

"We seek complete normalization of trade, lifting of also the tariff rate quotas," Dombrovskis said both during his press conference and in a Q&A after a speech at Georgetown's Law School. He said during that Q&A that the EU will end free allowances to its carbon-intensive industries, such as steelmakers, and will impose tariffs on imports equivalent to the price on carbon that those industries pay. He said that he does not expect the U.S. to impose a price on carbon equivalent to its own, but that European officials want to figure out ways to compare U.S. regulations to fight climate change and the European carbon price so that the carbon border adjustment mechanism doesn't create "new difficulties between us."

Dombrovskis also was asked about how the EU might go beyond due diligence measures in combating forced labor, to which he responded that the 27 countries are considering a proposal to ban the import of goods made with forced labor, with the responsibility put on "companies to ensure that they are checking their value chains, and that no forced labor is in their value chains."