Turkish imports exceed new EU quotas
For many types of steel products, Turkey will be the main source of steel imports from the EU, which is seeking access to the "excess" tariff quota (TRQ) mechanism under the new steel production regulation for countries with a free trade agreement (FTA) with the bloc.
Nine of the new country quotas set by Turkey, which were announced by the European Commission on June 30, were exceeded in the first days of the quota period from July to September. Turkish flat products, in particular, were the main reason for the excessive allocation of new quotas, which came into force on July 1, along with a 50% tariff exceeding the quota.
The extended "lockdown period" means that imports in excess of the quota during the first 14 days of this period, which are subsequently allocated for customs clearance, will be subject to part of the new 50% EU tariff.
In accordance with the new regulations, countries with a share of imports of a certain type of metal products exceeding 5% in the reporting period 2022-2024 received a country-specific quota (CSQ).
Overall, the volume of duty-free quotas in Turkey decreased by about 39%, to about 2.7 million tons per year, which is significantly lower than the overall 47% reduction in EU duty-free quotas. However, in the first two weeks of the new EU tariff regime, Turkish imports exceeded the country's new customs tariffs by a total of about 438,000 tons.
The quota of 160,574 tons of category 1A hot-rolled sheets and strips set by Turkey for the period from July to September was exceeded by about 135%. The quota for the production of grade 4A metal-coated sheets with a volume of 69,925 tons was also exceeded by more than 85%, while the quota for the production of grade 4B metal-coated sheets was exceeded by almost 90%.
As for long products, Turkey's quota for the production of valves in the amount of 59,919 tons was exceeded by almost 80%. On July 13, when the standard for the production of wire rods from unalloyed and other alloys weighing 61,147 tons was exceeded by more than 50%.
Competing for a share of additional transportation services
The recently introduced "overflow" quotas for specific products for the countries of the CSQ free trade area or part of the quotas of "other countries" provided for in the Regulations may help reduce the tariff obligations of importers of materials of Turkish origin. The Steel Production Ordinance states that countries will be given access to these additional duty-free quotas for specific types of products on a first-come, first-served basis. However, the lack of clarity regarding the exact application of this mechanism has led to differing interpretations among the research partners of the MEPs.
Based on July roll import volumes,