Indonesia to Lose European Commission Safeguard Exemption

by Hans Diederichs

The European Commission recently completed its review of the safeguard measures, which were introduced to prevent the redirection of material previously destined for the United States. The Commission has recommended changes, to the list of products from developing nations, that are currently excluded from the quota system. It has made the proposed amendments based on the latest full year’s import statistics, instead of the ones used in the previous definitive measures.

Brazil and India were removed from the list for stainless steel hot rolled sheets and strip. These countries will become exempt from the quotas for this product. Turkey has obtained an exemption from the safeguard measures for stainless steel hot rolled quarto plates. This could result in increased imports, into the EU, from these countries.

In the proposal, Indonesia will lose its developing nation exclusion for both stainless steel hot and cold rolled sheets and strip. Imports, in these categories, will be subject to the quota and tariff system. Tonnages, from this country, have been arriving in the EU at a growing rate, since mid-2018.

Hot rolled stainless steel, from Indonesia, increased to over 25 percent of the total imports into the EU, in the first quarter of 2019. China still accounts for more than half of the foreign sales into Europe. The safeguard measures have done little to stop the rise in stainless steel imports, from all countries, since they were introduced in July 2018.

The volume of Indonesian cold rolled stainless steel, arriving into the EU, increased to approximately 8 percent of total imports, in the first three months of this year. However, production of cold rolled material, in the country, is limited. Taiwan remains the largest supplier, of cold rolled sheets and strip, to Europe.

Crucially, imports of hot and cold rolled sheets and strip, from Indonesia in 2018, exceeded the World Trade Organisation’s 3 percent threshold, at which developing nation exemption is lost. This is the year that was used in the recent review by the European Commission.

Prior to the announcement of the proposed changes to the safeguard measures, Eurofer submitted an antidumping complaint to the European Commission. This covered hot rolled stainless steel sheet and coil from China, Indonesia and Taiwan. This investigation, combined with the application of quotas for Indonesia, is expected to result in a reduction in imports of hot rolled stainless steel products, in the remainder of 2019. The proposed changes, if agreed by the member states, will come into effect on October 1, 2019.

Source: MEPS              Photo: Fotolia

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