G/L/1408  
G/SG/266  
 
26 October 2021  
(21-8094) Page: 1/2 
Council for Trade in Goods  
Committee on Safeguards  Original: English  
 
IMMEDIATE NOTIFICATION TO THE COUNCIL FOR TRADE IN GOODS  
OF THE RESULTS OF THE CONSULTATIONS UNDER ARTICLE 12.3  
COMMUNICATION FROM CHINA  
Certain steel products  
 
The following communication, dated and received on 24 October 2021, is being circulated at the 
request of the delegation of China.  
 
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Pursuant to Article 12.5 of the WTO Agreement on Safeguards (the AS), China hereby notifies the 
results of the consultations conducted under Article 12.3 of the AS with the European Union (EU). 
The present notification is without prejudice to the rights reserved by China under the GATT 1994 
and the AS.  
 
China and the EU held consultations on 18 August and 26 August 2021 respectively to discuss the 
extension of the EU safeguar d measure on certain steel products1 (the safeguard measure).  
 
China has expressed the following position during the consultations : 
 
1.  China firmly oppose s the implementation and extension of the EU safeguard  measure  
 
The EU safeguard measure is inconsistent  with the WTO rules . There are problems in the analysis of 
key elements  of the safeguard measure,  such as import increase , injury , and "unforeseen 
developments".  Moreover, the EU's decision  to exten d the safeguard measure  lacks factual and lega l 
basis. It failed to demonstrate that the  safeguard  measure  continues to be  necessary to prevent or 
remedy serious injury  and that the domestic industry is adjusting . On the contrary, there are 
sufficient facts to indicate that the deterioration of the EU steel enterprises during the investigation 
period was mainly due to  the impact of the COVID -19 pandemic and the decline of domestic demand,  
which  should  not be remedied by  a safeguard measure.  
 
In addition , the improving public health situation leads to the rebound of EU 's economy exceeds 
expectations and the recovery of  internal market demand , and the steel products are in short supply. 
EU's insistence on extending the safeguard measure  could only provide further  over-prote ction to 
the EU steel industry . It is not in line with the EU 's overall interests and will exacerbate the distortion 
of global steel trade.  
 
In contrast, many  WTO Members have announced  the termination of either steel-related safeguard 
measures  or investigations. In the spirit of maintaining global fair trade and promoting the healthy 
development of steel trade, several steel -producing countries such as China have elected not to 
initiat e steel safeguard investigations in response to the United St ates Section 232 tariff measures.  
 
 
1Notified by the means of the documents G/SG/N/8/EU/1/Suppl.2 - G/SG/N/10/EU/1/Suppl.11 - 
G/SG/N/11/EU/1/Suppl.8; and G/SG/N/8/EU/1/Suppl.2/Corr.1 - G/SG/N/10/EU/1/Suppl.11/Corr.1 - 
G/SG/N/11/EU/1/Suppl.8/Corr.1.  G/L/1408 • G/SG/266  
 
- 2 - 
 
  2.  The EU takes advantages of the trade remedy measures to provide excessive protection 
to its steel industry  
 
As part of EU 's industrial policy, systematic and comprehensive trade remedy measures have been 
provided as protection to the EU steel industry. By 2020, there were in total 147 EU anti -dumping 
and anti -subsidy measures in force, out of which, 56 measures concern steel products. Among these 
measures, 51 of them came into effect before the safeguard m easure, 4 were implemented during 
the safeguard measure period. Furthermore, there are 7 ongoing investigations. Some of 147 
measures have been effective for over 15 years. The measures cover almost all categories of steel 
products and extends to downstrea m steel articles: hot rolled and cold rolled flat products (including 
various thicknesses, different coatings and functions such as corrosion resistance), long products 
such as steel bars and wire rods, different kinds of pipes and tubes, various kinds of stainless steels. 
Almost all exporting members to the EU have been seriously affected.  
 
Long-term trade remedy protection has led to structural imbalances in the EU steel market. EU steel 
companies have been allowed to maintain high market shares and produ ct prices, continuously 
gaining market shares from the imported products and forming oligopolistic structures in many 
market segments. At the same time, the EU downstream demand is not effectively met due to the 
impact of both high prices and unstable supp ly. Even when many EU downstream enterprises are 
calling for the immediate termination of the safeguard measure to stabilize market price and ensure 
supply, the EU steel industry continues to seek protection under trade remedy measures and export 
a large a mount of products overseas. For years, t he export has been exceeding 30 million tons.  
 
The unfair competitive advantages gained by the EU steel industry have harmed the interests of all 
parties, including those of the EU industry itself in terms of its lon g-term development. China hopes 
that the EU will pay attention to and correct the above -mentioned issues to reduce market distortions 
caused by excessive protection.  
 
3.  Conclusion  
 
By now, mankind is faced with stern challenges posed by the COVID -19 pandemic  and a fragile world 
economy as the pandemic is undergoing many twists and turns, including the constant mutations of 
the virus . At such critical moment , we value  mutual respect a nd sincere cooperation more than ever.  
As DG Okonjo -Iweala stated, "Multilateral Trading System has shown resilience despite the severity 
of the global health and economic crisis caused by the COVID -19 pandemic. Members have, by and 
large, heeded the call to refrain from imposing trade restrictive measures on products and services 
necessary for combating COVID -19. WTO members must show collective leadership, act to ensure 
that markets remain open. " China calls on all parties to properly resolve trade fricti ons through 
dialogue and cooperation. In this way, we can turn the risk of conflict into a driving force for industrial 
cooperation, and jointly build a more open world economy.  
 
China also submitted to the EU its calculation of adverse effects and request ed compensation thereof 
under Article 8.1 of the AS.  
 
The EU stated its position and views on the above issues.  
 
No agreement was reached in terms of the calculation of adverse effects or the adequate means of 
compensation under Article 8.1 of the AS.  
 
China reserves all its rights under the Agreement Establishing the World Trade Organization and its 
Annexes, including the Agreement on Safeguards and the Understanding on Rules and Procedures 
Governing the Settlement of Disputes.  
 
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