Seoul, EU Reach Consensus on Steel Import Quotas
Quick Look
- South Korea and the EU have reached a broad consensus on the EU's new steel import quota system, which initially threatened a 46% reduction for Korean steelmakers.
- Minister Kim Jung-kwan stated the volume would not be reduced as drastically and warned of retaliatory measures if the EU violates the free trade agreement.
AI-generated summary
Why It Matters
The EU plans to implement a new steel import quota system, significantly reducing tariff-free quotas and increasing rates on imports exceeding the quotas, to address global overcapacity. This measure is expected to impact South Korean steelmakers.
SEJONG, June 23 (Yonhap) -- Seoul has reached a broad consensus with the European Union (EU) regarding the economic bloc's planned implementation of a new steel import quota system that could adversely affect South Korean steelmakers, the industry minister said Monday.
"Our quota is about 2.58 million tons, and there was a consensus that the volume would not be reduced by as much as 46 percent," Industry Minister Kim Jung-kwan told reporters during a press briefing held in the central city of Sejong, without elaborating on the figures.
"We are not offering anything specific to the EU," Kim added. "We did point out that (the measure) violates the free trade agreement and emphasized that Seoul could also take retaliatory measures."
The briefing came after Kim's recent trip to the Middle East, Europe and Kazakhstan.
The remarks came as the EU plans to sharply reduce tariff-free quotas on 30 steel products and raise the tariff rate to 50 percent on imports exceeding the quotas, as part of efforts to address global overcapacity. The measures are expected to go into effect starting July 1.
The new system is expected to adversely impact South Korean companies, with the EU's tariff-free steel import quota for Asia's fourth-largest economy set to be cut by 46 percent, to 18.3 million tons from the current 33.8 million tons.
South Korea will also implement measures to support steelmakers once the quota is finalized, Kim added.
Touching on reconstruction projects in the Middle East, Kim said the government will consider ways to participate in such opportunities once lingering risks are resolved.
"I have met officials from South Korean companies operating in the Middle East, and they were willing to participate in various reconstruction projects," Kim said.
"There are, however, financial sanctions against Iran, and negotiations with the United States remain sluggish, so we are remaining on the sidelines due to potential risks," he added.
Kim also hinted at a possible end to the fuel tax cut program.
"We have not yet made a final decision on whether to end the measure, as peace talks and efforts to normalize shipping through the Strait of Hormuz are still under way and progressing slowly," Kim said.
What to Watch
AI outlook — possibilities, not facts
EU's steel import quota reduction will be less than the initially proposed 46%.
Likely · Short term
South Korea may implement retaliatory trade measures if the EU violates the free trade agreement.
Possible · Short term
Open Questions
- What are the final agreed-upon quota figures?
- What specific retaliatory measures could South Korea take?
- When will the fuel tax cut program decision be made?
