South Korea seeks to replace lost EU steel trade

South Korea’s government will aim to stimulate domestic steel demand by 510,000 tonnes per year to fill the gap left by EU cuts to the country’s tariff-free import quotas.

Minister of Trade, Industry and Resources Kim Jeong-kwan revealed at a July 1 meeting how the country would go “all out” to mitigate the effects of the European Commission’s new Steel Regulation.

The EU's new Steel Regulation trade defence regime, which was launched that day, reduced the bloc’s annual total tariff-rate quota (TRQ) volumes by around 47% to 18.35 million tonnes. Minister Kim told the meeting that South Korea's TRQs would decrease by 19.7%, falling from 2.58m tonnes to 2.07m tonnes. However, the EU’s TRQs show far greater reductions in certain product categories, including: 1A Non Alloy and Other Alloy Hot Rolled Sheets and Strips, down by 39% to 461,830 tonnes; and Non Alloy and Other Alloy Cold Rolled Sheets, down by 34% to 254,611 tonnes.

Access to the EU Steel Regulation’s new product-specific “overflow” quotas for countries with a free trade agreement (FTA) could mitigate South Korea’s reduced tariff-free access. The country will compete with other FTA countries on a first-come, first-served basis for access to these additional volumes. Nonetheless, the reduced TRQs are an unwanted barrier to tariff-free trade with the EU.