Lee Jae-myung, who is on a tour of Europe to attend the Group of Seven (G7) summit, asked for "friendly consideration" for Korea regarding the European Union's (EU) plan to tighten steel tariffs next month, the Blue House said. It said he strongly urged the EU, as a free trade agreement (FTA) partner and strategic partner, to accommodate Korean corporations to secure the maximum possible duty-free steel quota for Korea.
Kim Yong-beom, the Blue House policy chief accompanying President Lee on the Europe trip, announced the economic outcomes of the Korea-EU summit on the 11th (local time), saying, "President Lee, through the EU summit, strongly requested friendly consideration for Korea, an FTA partner and strategic partner, to secure the maximum duty-free steel quota." He added, "We cannot disclose it yet, but it appears there will be a better outcome compared with other countries."
The Deputy Minister said the summit between President Lee and the EU "was a perfect opportunity to raise the issue (securing the EU duty-free steel quota) at the highest level," adding, "There is content that the two sides have internally reached a tentative agreement on." However, citing both sides' interests, he said they would not make the details public and added, "We may not reach the previous level we enjoyed, but under this unfavorable system change, we expect to produce the best possible outcome."
◇EU to cut duty-free steel volumes by about half on the 1st of next month
According to the Blue House, starting on the 1st of next month, the EU will introduce a tariff rate quota (TRQ) system and reduce duty-free import quotas to about half. It also decided to impose a 50% tariff on imports that exceed the allocated volumes. The EU is Korea's second-largest steel export market, making the shock to the Korean market inevitable from this measure. Last year, 3.24 million tons were exported to the EU, of which 2.58 million tons were allocated as duty-free volumes by the EU. Once the system takes effect, the duty-free volumes entering the EU will fall by about 46%, from 33.82 million tons to 18.35 million tons.
The Deputy Minister said, "The government takes very seriously the impact of the EU's new steel import regime on our steel industry's exports to the EU and local supply chains, and from the early stages of negotiations has responded with full force so that our corporations, as an FTA partner, receive fair treatment and can maintain stable market access opportunities." He added, "We asked that interests be adjusted not only in steel but also in other areas so that the mutual benefits under the Korea-EU FTA are not undermined."
On this, the EU side said, "Korea is a country that shares common values and a strategically important partner," and conveyed the position that it "will give Korea's request the utmost consideration," according to the Deputy Minister. Under guidance from the two leaders, Yeo Han-koo, head of the Office of the Minister for Trade, is negotiating with the EU trade commissioner on the "Korea duty-free steel quota volumes." The Deputy Minister assessed, "We cannot disclose it yet, but we have made considerable progress."
The Blue House expects the outcome of these negotiations to be announced as early as the end of this month, or by around the 1st of next month at the latest. The Deputy Minister said, "President Lee explained the importance of the steel issue to bilateral relations and asked for the utmost consideration and attention so that Korean corporations do not suffer unreasonable disadvantages," adding, "It will be a good example showing the fruits of productive cooperation between partners with similar positions."