[ferro-alloys.com]World Trade Organization members have agreed to the establishment of a dispute panel to review a complaint filed by Turkey regarding the European Union's safeguard measures on imports of certain steel products. The decision to set up the panel was made at a meeting of the Dispute Settlement Body (DSB) on Aug. 28, the WTO said in a statement.

The review may open the way for other countries to complain against the EU's recent introduction of country-specific quotas on steel products including hot-rolled coil (HRC), instead of its previous global import quota, as protectionism rises in steel markets recently eroded by the initial impact of the COVID-19 pandemic. The switch to quarterly country-specific quotas was made in the EU safeguards review published June 30.

The DSB's next meeting will take place Sept. 28. No information was immediately given as to how long it might take the panel to reach a decision on Turkey's complaint. The US, Switzerland, Norway, the UK, Ukraine, Russia, Argentina, Canada, China, Korea, Japan, Brazil and India all reserved their third party rights to participate in the proceedings.

Turkey has submitted two requests for a panel to be established to rule on provisional and definitive safeguard measures imposed by the EU on imports of certain steel products and the investigation that led to the imposition of those measures. Turkey's first request was blocked by the EU at a DSB meeting on July 29. According to the WTO statement, the EU regrets that Turkey has once again requested the establishment of a panel, that a round of consultations failed to resolve differences between the two and said it firmly believes its safeguard measures are justified and in line with WTO rules.

The EU provisionally imposed a steel imports safeguards system in mid-2018 following a deviation of global steel trade flows after the US imposed Section 232 import curbs in March 2018. The EU safeguards system, formalized in early 2019, has imposed definitive safeguard measures on 26 out of the 28 Turkish steel product categories examined. These have subsequently been reviewed, including through the regulation published June 30, which made the safeguard measures even more trade-restrictive, Turkey said.

The EU notified the WTO in June that it would impose country-specific quotas on HRC imports as of July 1, instead of a global quota, in a move that observers said would particularly impact Turkey's exports.

Turkey shipped more than 3 million mt of HRC to the EU region during a 12-month period to July 2019, falling to 1.5 million mt in the July 2019-March 2020 period, annualized to 2 million mt.

Under the latest quota regulation, Turkish mills can ship only 1.37 million mt of HRC to the EU region during the July 2020 to July 2021 period, a sharp on-year decline.

Drawing attention to the ongoing decline in Turkish mills' steel export volumes to the EU in recent years, due to the quotas, Ugur Dalbeler, CEO of a major Turkish HRC producer and a director of the Turkish Steel Exporters' Union (CIB), told Platts in June that "with this new move the European steel sector showed its desperation and negative attitude against Turkey."

According to the WTO statement, Turkey said the measures "are clearly inconsistent with WTO rules" because the EU failed to make reasoned and adequate determinations regarding product definitions, the existence of unforeseen developments, the existence of an alleged threat of serious injury to the domestic EU industry, the causal relationship between the increased imports and the alleged threat of serious injury to the domestic industry, the exclusion of certain countries from the safeguard with whom the EU has free trade agreements, and the EU's reduced pace of liberalization of the definitive safeguard measures.

(S&P Global Platts)

• [Editor:王可]