Korean Steel Industry on High Alert Over EU Quota Reduction

"Hopes Pinned on Individual Country Negotiations"

The European Union (EU) has announced plans to cut its steel import quota by half and raise tariffs to 50% in order to protect its domestic steel industry. In response, the Korean steel industry, together with the government, has begun efforts to persuade the EU, responding with heightened vigilance.

On October 7 (local time), the European Commission officially announced a set of regulations aimed at protecting the European steel industry.

The global duty-free quota for imported steel products will be reduced by 47%, from 30.53 million tons per year last year to 18.3 million tons. The tariff on imports exceeding the quota will be raised from the current 25% to 50%. In addition, the EU stated that individual country quotas will be determined through separate negotiations with each trading partner in the future.

This measure will apply to all third countries except for Norway, Iceland, and Liechtenstein, which are members of the European Economic Area (EEA).

Steel products are piled up at Pyeongtaek Port in Gyeonggi Province. Photo by Yonhap News Agency

It is estimated that South Korea exported about 3.8 million tons of steel products to the EU last year. Of this, approximately 2.63 million tons (from July last year to June this year) were exported under the quota allocated to Korea, while the remainder was exported duty-free using the global quota.

The EU applies a global quota system to imported steel, granting duty-free status to countries that secure quotas first. There are concerns that Korea's export quota could be cut in half and the global quota could also be reduced.

According to the Korea International Trade Association, Korea's steel exports to the EU last year (based on MTI 61) amounted to 4.48 billion dollars (about 6.3 trillion won), making the EU one of Korea's top two export markets for steel, alongside the United States (4.35 billion dollars).

However, the steel industry remains hopeful because the European Commission has indicated that individual country quotas will be determined through future negotiations.

The Ministry of Trade, Industry and Energy also stated on this day, "The EU has explicitly said that it will take into account free trade agreement (FTA) partner countries when allocating quotas by country," adding, "We plan to secure our interests to the fullest through bilateral consultations with the EU and other means."