The European Commission has announced on 24 August intentions to implement the recommendation and ruling from the World Trade Organization and bring the safeguard measure on certain steel products into conformity with the WTO Agreement on Safeguards and the GATT 1994. The Commission’s notice follows the WTO’s ruling on dispute case, whereby Turkey challenged the European Union’s Steel Safeguard measures before the WTO Dispute Settlement Body in 2020. The WTO’s final panel report was circulated on 29 April 2022. On 31 May 2022, the WTO DSB adopted the Panel report with a recommendation for the EU to bring its measures into conformity. The two inconsistencies that the WTO found concern Article XIX:1(a) of GATT: the original safeguard measure had not sufficiently explained how the increase in imports took place as a result of the unforeseen developments that had been identified. Also, the measure had not identified the GATT obligations whose effect resulted in the increase in imports; and Article 4.1(b) of the WTO Agreement on Safeguards: the panel found that two central elements of the determination of a threat of serious injury were not ‘based on facts’: first, the finding that the domestic industry was ‘in a fragile and vulnerable position’, despite its improved performance and, second, the finding that a further increase in import volumes in the future would bring about serious injury to the domestic industry. The European Commission also invited interested parties to submit comments by 14 September 2022. In order to effectively comply with the WTO ruling, the Commission may need to revise its safeguard duty adoption criteria and procedures, and potentially be forced to terminate the existing Steel Safeguards forthwith.
The European Commission has announced on 24 August intentions to implement the recommendation and ruling from the World Trade Organization and bring the safeguard measure on certain steel products into conformity with the WTO Agreement on Safeguards and the GATT 1994. The Commission’s notice follows the WTO’s ruling on dispute case, whereby Turkey challenged the European Union’s Steel Safeguard measures before the WTO Dispute Settlement Body in 2020. The WTO’s final panel report was circulated on 29 April 2022. On 31 May 2022, the WTO DSB adopted the Panel report with a recommendation for the EU to bring its measures into conformity. The two inconsistencies that the WTO found concern Article XIX:1(a) of GATT: the original safeguard measure had not sufficiently explained how the increase in imports took place as a result of the unforeseen developments that had been identified. Also, the measure had not identified the GATT obligations whose effect resulted in the increase in imports; and Article 4.1(b) of the WTO Agreement on Safeguards: the panel found that two central elements of the determination of a threat of serious injury were not ‘based on facts’: first, the finding that the domestic industry was ‘in a fragile and vulnerable position’, despite its improved performance and, second, the finding that a further increase in import volumes in the future would bring about serious injury to the domestic industry. The European Commission also invited interested parties to submit comments by 14 September 2022. In order to effectively comply with the WTO ruling, the Commission may need to revise its safeguard duty adoption criteria and procedures, and potentially be forced to terminate the existing Steel Safeguards forthwith.
