The Ministry of Trade, Industry and Resources said the British government announced on the 19th (local time) a plan to introduce a "new steel trade measure" to replace the existing steel safeguard.
The draft of the new steel trade measure released by Britain calls for cutting the overall quota size by 60% from the current system. The tariff rate applied to volumes exceeding the quota will also be raised from the current 25% to 50%, and the introduction of a crude steel (melt & pour) country-of-origin standard is under review.
However, in this announcement the British government did not specify whether it would uniformly reduce quotas by country and by item. Accordingly, the Ministry of Trade and Industry (MOTI) said further confirmation is needed on the detailed application method.
The British government also plans to begin the concession modification process under Article 28 of the GATT to raise the existing most-favored-nation (MFN) tariff to 50%. The new steel trade measure is scheduled to take effect on July 1.
Britain is a market that accounts for a significant share of Korea's steel exports. As of last year, steel exports to Britain totaled 640,000 tons (t), accounting for 2.3% of total steel exports and ranking 15th. The Ministry of Trade and Industry (MOTI) sees a possibility that exports to Britain by the domestic steel industry could be curtailed to some extent if the overall quota is reduced by 60% as announced by the British side.
The government judges that this measure is effectively an extension of the existing safeguard. Accordingly, it believes there is a potential violation of WTO agreements and a high likelihood that it could run afoul of the Korea-U.K. Free Trade Agreement (FTA), which provides for duty-free treatment of steel products. The Ministry of Trade and Industry (MOTI) said it will respond actively by working closely with the British side to minimize damage to our corporations.