Metal industry in Bosnia and Herzegovina affected by European Union’s safeguard measures

EPA-EFE/JULIAN SMITH

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The European Commission has imposed provisional safeguard measures concerning imports of a number of steel products. 

These measures, which came into effect on Thursday, July 19, will address the diversion of steel from other countries to the EU market as a result of the recently imposed US tariffs.

The US tariffs on steel products are causing trade diversion, which may result in serious harm to EU steelmakers and workers in this industry. We are left with no other choice than to introduce provisional safeguard measures to protect our domestic industry against a surge of imports. These measures nevertheless ensure that the EU market remains open, and will maintain traditional trade flows. I am convinced that they strike the right balance between the interest of EU producers and users of steel, like the automotive industry and the construction sector, who rely on imports. We will continue to monitor steel imports in order to take a final decision by early next year, at the latest”, stated Commissioner for Trade Cecilia Malmström.

The provisional measures concern 23 steel product categories and will take the form of a Tariff Rate Quota (TRQ). For each of the 23 categories, tariffs of 25 percent will only be imposed once imports exceed the average of imports over the last three years. The quota is allocated on a first come first serve basis, thus at this stage not allocated by individual exporting country.

These measures are imposed against all countries, with the exception of some developing countries with limited exports to the EU. Given the close economic ties between the EU and the European Economic Area (EEA) countries (Norway, Iceland, and Liechtenstein), they have also been exempted from the measures. These exclusions are compatible with both the EU’s bilateral and multilateral Word Trade Organization (WTO) obligations.

Steel Factory1

Statement issued by the European Commission also reads that the provisional safeguard measures “can remain in place for a maximum of 200 days”.

All interested parties will now have the opportunity to comment on the findings of the investigation so far. The Commission will take these comments into consideration in order to reach its final conclusion, at the latest by early 2019. If all conditions are met, definitive safeguard measures may be imposed as a result”, the statement reads.

Minister of Foreign Trade and Economic Relations of BiH Mirko Sarovic confirmed that the metal industry in Bosnia and Herzegovina would also be affected by the EU’s decision, as it limits the import of steel products from the non-EU countries.

According to some estimates, companies from Bosnia and Herzegovina might be forced to scale down production by as much as 30 percent, which would inevitably result in loss of jobs.

Sarovic told media that “BiH has to react in an adequate manner”, because the European Union’s decision is not in line with the “rules of the Stabilization and Association Agreement”.

Representatives of competent institutions in BiH are expected to discuss the issue at the meeting scheduled to take place on Monday, July 23.