UK steel safeguard under fire

Foreign governments have questioned the "unlawful" application of UK steel safeguards after Brexit, suggesting they violate the World Trade Organisation general agreement on tariffs and trade (GATT) and the agreement on safeguards, and should be terminated immediately.

After the Brexit transition period, the UK mirrored the European safeguard from January, without prior investigation into imports and their impact on the UK marketplace, several governments argue. The UK Trade Remedies Authority (TRA), formerly the Trade Remedies Investigations Directorate, is conducting a review to see whether the measures should continue or lapse at the end of June. It published its statement of intended final determination on 19 May and collected feedback until 26 May. UK international trade secretary Lizz Truss can approve or reject the measures.

South Korea said the UK safeguards "manifestly fail to meet" WTO requirements. "The UK illegally assumes that it can transition the EU steel safeguard measures. However, these measures are still attributable to the EU so that they cannot be, at the same time, attributed to the UK," it said in a filing to the TRA.

Article 2 of the WTO agreement on safeguards states: "A Member may apply a safeguard measure to a product only if that Member has determined … that such product is being imported into its territory in such increased quantities, absolute or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces like or directly competitive products."

The UK's application of measures was determined without any investigation, Seoul said. TRA's termination of measures on products where there is no UK production show there should have been no safeguard in the first place, it added.

Switzerland said the UK transitioning of the EU safeguard "without prior investigation, notification and adequate opportunity for prior consultations is inconsistent with the United Kingdom's obligations under the new trade agreement between Switzerland and the United Kingdom and under article XIX of the GATT 1994 and the WTO agreement on safeguards."

Brazil said the UK safeguard should be immediately terminated as it has "significant inconsistencies with the WTO rules", and that a safeguard that violates such rules could lead to a "spiral of retaliatory measures" and weaken the rules-based trading system. Brazilian producers have been removed from the safeguards on hot-rolled coil, hot-dip galvanised and rebar, among others, under TRA's preliminary findings.

Turkey said it wanted a "correction" of TRA's claim that "Turkish steel producers are continuing to increase their production capacity, fuelled by subsidies offered by the Turkish government". Ankara alluded to the European Commission dropping its countervailing duty investigation on hot-rolled material without any measures.

Foreign governments also said the quotas should be managed annually, rather than quarterly, while Russia said the safeguard has exacerbated shortages for downstream industries and contributed to price increases.

By Colin Richardson