Stalemate Continues: EU and US Can't Break the Ice on Steel Agreement

EU Trade Commissioner Valdis Dombrovskis is eager to forge a steel trade pact with the US, an initiative aimed at preventing a resurgence of Section 232 and EU retaliatory tariffs. However, he insists that any agreement reached must adhere to the standards set by global trade laws.

Critics have pointed out that certain aspects of the US's suggested approach may unjustly prejudice against imports from specific nations, thereby contravening World Trade Organization (WTO) rules.

A recent working document by David Kleimann, a visiting scholar at Bruegel, highlights concerns about the US's proposed solutions. He describes them as a unilateral, heavy-handed approach that lacks clear regulations for domestic limitations. Kleimann argues that these proposals would require the EU to abandon its Carbon Border Adjustment (CBAM) regulation and accept strategies inconsistent with WTO guidelines.

Kleimann also notes that the US's plans for emission benchmarks may lead to implicit bias against imports from non-member countries in the context of international trade laws.

Dombrovskis, speaking to The Financial Times, affirmed the EU's dedication to multilateralism and adherence to global rules. He expressed his reluctance to be part of agreements that openly defy WTO rules.

The parties have faced significant challenges in reaching a consensus on the Global Arrangement on Sustainable Steel and Aluminum (GSA) before the October deadline. If they fail to reach a deal, the US and, consequently, EU tariffs might be reintroduced in December.

Sam Michel, a spokesperson for the US trade representative's office, acknowledged the EU's concerns but is awaiting a proposal from the EU that aligns with the US's ambitious goals and addresses mutual worries about climate change and overcapacity.

When asked whether he and US Trade Representative Katherine Tai would extend their peace period if no agreement is reached by October, Dombrovskis did not comment. However, he took to Twitter after a meeting with Tai last week to reiterate his commitment to securing a deal by the fall.

Source : eurometal.net (Reporting by Adam Smith)