Assofermet Criticizes EU's Potential Extension of Steel Import Safeguards
Assofermet, the Italian industry association representing steel product distributors, has raised strong objections to the possible extension and further tightening of the European Union’s safeguard measures on steel imports. In a statement, the association voiced its concern over the European Commission’s potential decision to extend the safeguards beyond their current expiry date of December 31, 2025. Assofermet’s position is clear: they believe these trade protection measures will not solve the deep-rooted issues plaguing the European steel market.
The Core Issue: Structural Problems in the Steel Market
At the heart of Assofermet's criticism is the argument that the EU’s safeguard measures, which were initially designed to protect the European steel industry from a surge of imports, do not address the fundamental challenges faced by the market. The association believes that the current state of the steel market in the EU is driven by a persistent lack of demand from steel-consuming sectors, such as construction, automotive, and machinery manufacturing. Simply tightening the import restrictions will not stimulate demand or consumption of steel.
According to Assofermet, the focus should shift from protective trade measures to broader economic policies that can foster growth in demand. Instead of more import restrictions, Assofermet advocates for policies aimed at invigorating the steel-using end-user sectors, thereby creating long-term demand for steel. They argue that without addressing the demand side of the equation, any attempt to restrict imports further will only lead to short-term protectionism without resolving the structural problems within the industry.
Concerns Over Uncertainty and Increased Costs
One of the key points raised by Assofermet is the uncertainty that extending or further tightening the safeguard measures will introduce into the European steel sector. The association argues that creating an environment of ongoing uncertainty will only add to the challenges that manufacturers and distributors already face. The extension of protective measures would also conflict with the European Union’s Carbon Border Adjustment Mechanism, which aims to address carbon emissions and is expected to add additional costs to the European manufacturing industry. Assofermet warns that duplicating these protective trade measures with the CBAM could result in further cost increases for EU industries, particularly those reliant on steel imports.
Assofermet's Proposal: A Flexible System of Tariff Quotas
Rather than extending or tightening the safeguard measures as they stand, Assofermet has proposed a more flexible approach. Specifically, they suggest the introduction of a system of global quotas based on product categories, replacing the current system of country-specific quotas. This proposal would allow for greater flexibility in managing steel imports, ensuring that market conditions are better accommodated and allowing for adjustments based on demand shifts. Additionally, the association advocates for a mechanism that would allow unused quotas to be reallocated at the end of each quarter, further enhancing flexibility and efficiency in the system.
Assofermet stresses that any revisions to the safeguard measures should ensure that the regulatory system remains in line with existing European Union legislation and World Trade Organization rules. The association firmly believes that there should be no further extensions to the safeguard measures beyond 2025, urging that they should be archived to avoid unnecessary duplication with the CBAM.
The Call for Structural Solutions
Ultimately, Assofermet has urged the European Commission to shift focus away from protectionist measures and towards structural solutions that will address the root causes of the challenges facing the European steel market. Instead of relying on trade protection measures, Assofermet advocates for economic policies that will increase demand and enhance the competitiveness of the EU's steel industry. The association suggests that structural reforms in the EU’s economy, rather than continued reliance on restrictive import policies, are essential to ensuring the long-term sustainability and growth of the industry.
By prioritizing solutions that boost demand and improve the overall competitiveness of European industries, Assofermet believes the EU can better support its steel sector without resorting to protectionism. The association is committed to a balanced approach, one that integrates fair trade practices, sustainable growth, and market-driven solutions.
