Seoul and EU Agree on Steel Quota System

South Korea and the European Union have reached a broad consensus on the EU's new steel import quota system, which took effect July 1, according to Industry Minister Kim Jung-kwan. The agreement came after negotiations that saw South Korea's tariff-free quota reduced by about 20 percent, a smaller cut than the EU's overall reduction.

The EU implemented new steel safeguards aimed at addressing global oversupply, sharply reducing tariff-free quotas on 30 steel products and raising the tariff rate to 50 percent on imports exceeding the quotas.

Coverage Comparison

Initial reports from Yonhap News on June 23 quoted Minister Kim as saying the broad consensus would prevent South Korea's quota from being reduced by as much as the EU's overall 46 percent cut. A follow-up report on June 30 confirmed the final allocation, and a July 1 article detailed the government's support measures.

Key Claims

  • South Korea's steel import quota to the EU is 2.07 million tons, down around 19.7 to 20 percent from the previous level of 2.58 million tons.
  • The EU's overall tariff-free quota is 18.35 million tons, down 46 percent from the previous 33.82 million tons.
  • The EU will raise the tariff rate to 50 percent on imports exceeding the quotas.
  • South Korea has access to an additional quota of 1.47 million tons that can be utilized through competition with other countries.
  • The measures are expected to go into effect starting July 1.
  • South Korea will implement measures to support steelmakers once the quota is finalized, including creating new demand for steel products and coordinating supply chain cooperation.
The trade ministry said South Korea made every effort to protect local steelmakers' access to the EU market, with Trade Minister Yeo Han-koo stating, "South Korea has utilized all available channels to help local steelmakers export even one more ton of steel to the EU market."

The government will coordinate supply chain cooperation among steelmakers, shipbuilders, defense companies and renewable energy businesses to generate new domestic demand. According to Minister Kim, "By bolstering industrial ties and rooting out unfair imports of raw materials, we can create demand of more than 510,000 tons, hovering above the quota reduction."

Perspectives

South Korean Government

The South Korean government, through Industry Minister Kim Jung-kwan and Trade Minister Yeo Han-koo, views the EU measures as a challenge stemming from global oversupply and protectionism. It considers the negotiated quota reduction (19.7 percent) preferable to the EU's overall cut (46 percent) and emphasizes proactive support for domestic steelmakers, including creating new demand and continuing dialogue with the EU.

European Union

The EU implemented the new steel safeguards to address global oversupply, sharply reducing tariff-free quotas across 30 steel products and imposing a 50 percent tariff on imports exceeding the quotas. The bloc's overall quota reduction to 18.35 million tons reflects its commitment to tackling overcapacity, though it did agree to a smaller reduction for South Korea than the overall cut.