Britain extends steel tariffs in breach of trade rules

BRITAIN on Wednesday extended a package of tariffs and quotas on 5 steel products by 2 years to shield local steelmakers, acknowledging it would breach international trade rules but saying it was needed for the national interest.

Trade minister Anne-Marie Trevelyan told parliament the safeguards would help defend a strategic industry and British steel producers could face “serious injury” were the measures not maintained.

Since leaving the European Union and the bloc’s common trade policy, Britain has sought to carve out a role on the global stage as a champion of free commerce, calling out restrictive practices by others like China and advocating for World Trade Organization (WTO) reform.

Trevelyan, too, described herself as a champion of free trade, but said present circumstances warranted the extension of safeguards.

“The decision ... departs from our international legal obligations under the relevant WTO agreement,” Trevelyan said. “However, from time to time, issues may arise where the national interest requires action to be taken.”

Britain is ready to take up any concerns raised by WTO members following its decision, Trevelyan added.

The move, while welcomed by the UK steel industry, is likely to upset some local manufacturers, which say they have to rely on overseas steel because domestic suppliers cannot meet demand.

“The extension of the UK’s steel safeguards is absolutely vital to the long-term health of the steel industry in the UK and is in line with the course of action being taken by governments across the world,” said Richard Warren, an official with trade body UK Steel.

“Deficient or absent safeguards measures risk trade diversion away from shielded markets elsewhere, resulting in surges of imports into the UK,” Warren added.

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The Times newspaper reported this week without citing a source that Trevelyan, while supporting steel tariffs, had warned that nations including India, Turkey and South Korea would be entitled to retaliate with their own trade tariffs.

Britain introduced new rules a year ago to protect its steel industry, which employs nearly 34,000 people and makes some US$2 billion in annual turnover.

British ministers have pointed out in recent days that most other rich countries also protect their domestic steel industries.

Last year, Britain retained quotas and tariffs it inherited from the European Union on 10 categories of steel for 3 years. But on 5 products, the safeguards were extended on a temporary basis for 1 year.