Members of the World Trade Organization (WTO) have agreed to set up a dispute settlement commission to deal with a complaint filed by Turkey regarding European Union safeguards for the import of certain steel products. The decision to create the commission was made at a meeting of the Dispute Resolution Body (DSB) on August 28, the WTO said in a statement.
The creation of the commission may become a precedent for other countries intending to appeal against the recent introduction of the EU quotas on steel products.
The next DSB meeting will take place on 28 September. No information was provided on how long it might take for the group to decide on Turkey's complaint. The United States, Switzerland, Norway, United Kingdom, Ukraine, Russia, Argentina, Canada, China, Korea, Japan, Brazil and India have reserved their third party rights to participate in the proceedings.
Turkey has filed two requests for the creation of a commission to rule on temporary and final safeguards imposed by the EU on the import of certain steel products and on the investigation that led to these measures. Turkey's first request was blocked by the EU at the July 29 DSB meeting. According to the WTO statement, the EU is firmly convinced that its safeguards are justified and in line with WTO rules.
The EU introduced an interim safeguard system on steel imports in mid-2018 following a redirection of global steel trade flows as a result of US protectionist measures in March 2018. Subsequently, these measures were revised towards strengthening.
In June, the EU notified the WTO that it will set country-specific quotas on imports of hot rolled steel from 1 July instead of the global quota, which observers believe will particularly affect Turkey's exports.
Turkey lost about half of its hot rolled coil exports to the EU last year and may lose another 40% this year and next.
According to the latest regulations, Turkish mills can only ship 1.37 million tonnes of hot rolled steel coils to the EU region between July 2020 and July 2021.
Turkey said the measures were “clearly incompatible with WTO rules” because the EU was unable to make reasonable and adequate definitions regarding product definitions, unforeseen events and the perceived threat of serious harm to domestic steel producers in Europe.
On Friday, the head of European Union diplomacy, Josep Borrell, threatened Turkey with sanctions for illegal drilling activities in the Eastern Mediterranean. In addition, he said that the EU will prepare additional measures against Ankara by September 24 in case there is no progress from the Turkish side. Borrell pointed out that there is growing frustration in Europe with Turkey's behavior.