G/SG/N/10/EU/1/Suppl.16  
 
2 December 2022  
(22-8992) Page: 1/20 
Committee on Safeguards  Original: English  
 
NOTIFICATION PURSUANT TO ARTICLE 12.1(C)  
OF THE AGREEMENT ON SAFEGUARDS  
EUROPEAN UNION 
Certain Steel Products  
Supplement  
The following notification , dated and received on 1 December 2022  is being circulated at the request 
of the delegation of European Union.  
 
_______________  
 
 
By Commission Implementing Regulation (EU) 2018/1013 ( "the Provisional Regulation "), the 
Commission imposed a provisional safeguard measure on certain steel product s. By Commission 
Implementing Regulation (EU) 2019/159 ( "the Definitive Regulation "), the European Commission 
imposed a definitive safeguard measure on certain steel products ( "the safeguard measure "). 
On 16 July 2020, Türkiye requested the establishment o f a panel. A panel was established on 
28 August 2020. The Panel Report was circulated on 29 April 2022. Since none of the parties 
appealed the panel report, it was adopted by the Dispute Settlement Body ( "DSB") on 31 May 2022.  
By communication to the WTO o f 5 August 2022, Türkiye and the European Union informed that, 
they had agreed that the reasonable period of time for the European Union to implement the 
recommendations and rulings of the DSB in the dispute European Union – Safeguard Measures on 
Certain S teel Products (DS595) will expire on 16 January 2023, which is seven months and 
sixteen  days from the day of adoption of the DSB recommendations and rulings on 31 May 2022.  
The Commission published on 24 August 2022 a Notice of Initiation informing of its intention to 
implement the Panel Report by bringing the original measure into conformity with WTO rules in those 
instances where the Panel had found inconsistencies, and inviting interested parties to submit 
comments.  
1. Implementation of the  Panel Report  
The details of the European Union 's proposed implementation of the Panel Report can be found in 
the Annex to this notification.  
2. Precise description of the product involved  
The product subject to the safeguard measure is certain steel products . The relevant tariff lines 
subject to the measure are the same as those listed in Annex I to the Notification of 7 February  2019 
(G/SG/N/8/EU/1/Suppl.1;G/SG/N/10/EU/1/Suppl.1; G/SG/N/11/EU/1/Suppl.2).  G/SG/N/10/EU/1/Suppl.16  
 
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  3. If the final measure replaces a provisional measure, o r if a final measure is 
extended, a Member is encouraged to provide a written description of any part of the 
imported product that will no longer be subject to the measure.  
The proposed amendment to the original measure does not introduce any changes to i ts scope, 
neither in terms of product definition, nor in terms of geographical coverage. However, it 
supplements the original measure insofar as some of its aspects are concerned.  
4. Description of the proposed measure  
The proposed measure consists of a Tari ff-Rate Quota ( "TRQ") available per product category, out 
of which, an out -of-quota 25% duty applies.  
5. Proposed date of introduction of the measure  
The proposed entry into force of the amendment to the original measure will come into effect on 
16 January 2 023 at the latest.  
6. Expected duration of the measure  
The proposed amendment to the measure does not change its current expiry date.1 
7. Expected timetable for progressive liberalization of the measure  
The proposed amendment to the measure does not affect the  current schedule of liberalisation.  
8. If the notification relates only to a finding of serious injury or threat thereof, and 
does not relate to a decision to apply or extend a safeguard measure  
Not applicable.  
9. Invitation for consultations  
The European Union  is prepared to consult with those Members having a substantial interest as 
exporters of the product concerned, with a view to exchanging views on the proposal.  
Consultations will take place, either in person or on a virtual setting, from Thursday 1 December 
until Friday 9 December . 
Members wishing to engage in consultations should directly contact either the European Union 
Delegation in Geneva or the European Com mission at:  
TRADE -SAFE009 -REVIEW@ec.europa.eu   
enrique.arrieta@ec.europa.eu   
The members should indicate in their email at least two different tim e slots for the consultations 
and, if possible, provide in their request already the names and email addresses of the participants.  
10. Members are encouraged to attach, in an electronic form, publicly available 
document(s) containing the relevant decision(s) made by the competent authority.  
Not applicable at this stage.  
 
 
1 30 June 2024 at 23h59, Brussels time.  G/SG/N/10/EU/1/Suppl.16  
 
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  ANNEX  
1  SUMMARY OF THE FINDINGS OF THE PANEL  
(1) Among the many claims brought up by Türkiye in the dispute, the Panel only found that 
Türkiye had established that the definitive safeguard was inconsistent with the following 
provisions:  
(a) Article XIX:1(a) of the GATT 1 994, because the European Commission did not 
ascertain that the increase in imports took place as a result of the unforeseen 
developments it had identified, and did not identify in its published reports the 
obligations whose effect resulted in the increase  in imports;  
(b) Article 4.1(b) of the Agreement on Safeguards, because two central elements of the 
European Commission's determination of a threat of serious injury were not "based 
on facts" as required by that provision.  
2  IMPLEMENTATION OF THE PANEL REPORT  
(2) For implementing the Panel Report, the Commission only used information that was 
available at the time it made its original determination, and thus, it did not refer to any 
data that became available after the adoption of the Definitive Regulation.  
Attract iveness of Union market  
(3) In its original determination, the Commission explained that the Union steel market was 
attractive for imports in terms of size and prices.1 In this respect, according to OECD data2, 
in the years prior to the initiation of the inv estigation that led to the imposition of a 
safeguard measure, the Union market was the largest importing territory in terms of 
volumes, accounting from 13,8% to 18,4% of the global share of imports throughout this 
period.  
(4) In addition to the volumes, the U nion market was also very attractive in terms of prices. 
In fact, an analysis of the relevant data3 showed that the main steel exporting countries to 
the Union achieved, for a large proportion of their exports (from 46% to 78% of the CN 
codes concerned), a higher price in the Union market as compared to the export prices 
achieved in other third markets for the same CN codes. For these countries, the 
Union  market also represented an important share of their exports, being the main or 
among their main export destinations, in some cases reaching more than 25% share and 
even reaching 32% in a given year.4 
(5) The attractiveness of the Union market was also confirmed by the fact that while the main 
steel exporting countries5 were reducing exports to third countries, they were increasing 
their exports to the Union at a fast pace. In particular, exports to other t hird countries from 
these origins decreased by more than 11 million tonnes ( -8%) in 20186 when compared to 
2017.7 On the other hand, in the same period, imports into the Union from these origins 
increased by more than 3 million tonnes (+14%).8 These opp osite trends showed that while 
imports to other third countries decreased generally, in a context of increasing overcapacity 
and increased restriction to access markets worldwide (see Sections 2.1.1. and 2.1.2. 
below), and in the absence of any major posit ive developments in their domestic 
 
1 See recital (35) of the Provisional Regulation, and Section 4 of the Definitive Regulation.  
2 See OECD, "Recent Developments in Steel Trade and Trade Policy Measures ", DSTI/SC(2018)3, p.9, 
table 3.  
3 Source: DG TRADE calculations on Global Trade Atlas data ( https://ihsmarkit.com/index.html )– raw 
data available upon subscription – period analysed:  2014-2017.  
4 Ibid 
5 These countries were: China, India, Russia, South Korea, Taiwan, Türkiye and Ukraine, and represented 
around 75% of total imports into the Union in 2018.  
6 Data for full year 2018 extrapolated based on the data available for the period January -November  2018.  
7 Source: Global Trade Atlas ( https://ihsmarkit.com/index.html ) – available upon subscription.  
8 See recital (32) of the Provisional Regulation.  G/SG/N/10/EU/1/Suppl.16  
 
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  consumption, exporting producers seized the opportunity to dispose of ever larger volumes 
into the Union market.  
(6) Therefore, the above set of data shows that, unequivocally, the Union market was 
attractive for exporting p roducers in terms of both volumes and prices.  
2.1  Increased imports as a result of unforeseen developments  
(7) The Panel Report endorsed the Commission findings and conclusions in its Definitive 
Regulation concerning the establishment of unforeseen developments9 and increased 
imports.10 
(8) The Panel Report found, however, that the explanations provided in the Definitive 
Regulation showing that imports into the Union increased as a result of the unforeseen 
developments were insufficient. The subsections below thus pr ovide with additional 
information and a more detailed explanation linking each of the unforeseen developments 
identified with the increase in imports that took place, thereby supplementing the original 
findings.  
2.1.1   Increase of imports to the Union due to glob al overcapacity in the steel sector  
(9) In the original determination, the Commission established that overcapacity existed in the 
steel sector and that despite efforts aiming to reduce it; it had nevertheless increased over 
the period of investigation.11 
(10)  Several sources have consistently confirmed the direct link between excess capacity in the 
steel sector and its effects on exports. For instance, the OECD noted, "Excessive levels of 
steelmaking capacity have important implications for the steel industry, ofte n associated 
with over -supply, low prices, and weak profitability" .12 It also noted that "At the global 
level, the effects of excess capacity are transmitted through trade; excess capacity can 
lead to export surges, leading to price declines and market share losses for import -
competing domestic producers."13 
(11)  Similarly, othe r studies point into the same direction. A 2014 "Economic Policy Institute" 
paper14, which noted, "Excess capacity means that steel production facilities have the 
capacity to produce much more steel than the market demands. High fixed costs, capital 
intens ity, and the large scale of steelmaking encourages to export the surplus at 
below -market rates. […] "Excess capacity leads to overproduction and surges of exports" 
and that "[t]he high capital intensity of the industry leads producers to maximize 
productio n to cover fixed costs, and this in turn leads them to dump excess production on 
foreign markets —particularly the attractive U.S. market —when domestic demand lags. 
This has led to repeated surges in unfairly traded steel over the years."  
(12)  In the same vein t he European Commission, in a 2016 Communication, also stated, "The 
excess production of steel has recently led to a dramatic increase of exports, the 
destabilisation of global steel markets and depression of steel prices world -wide".15 
 
9 See Panel Report at 7.117.  
10 Ibid at 7.190.  
11 See recitals (31) and (32) of the Provisional  Regulation, and recitals (51) to (54) of the Definitive 
Regulation.  
12 See OECD "Excess Capacity in the Global Steel Industry: The Current Situation and Ways Forward ", 
2015, p. 3.  
13 See OECD "Evaluating the Financial Health of the Steel Industry ", DSTI/SU/SC(2015)12/FINAL, 
9 June 2017, p. 25.  
14 Available at: https://www.epi.org/publication/surging -steel-imports   
15 Communication from the Commission to the European Parliament, the European Council, the Council, 
the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank 
– "Steel: Preserving sustainable jobs and growth in Europe "; COM (2016) 155 final, 16  March 2016.  G/SG/N/10/EU/1/Suppl.16  
 
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  (13)  Therefore, there is a generally accepted economic rationale explaining the action of 
exporting producers of offloading their excess capacity into third country markets (usually 
at lower prices) to at least contribute to covering part of their costs.  
(14)  The Commission then assess ed in further detail the direct link between the confirmed 
existing (and increasing) overcapacity in the steel sector, and the increase of imports into 
the Union.  
(15)  In a situation of overcapacity, and having an incentive to offload their excess capacity, 
exporting producers would target those markets which allow them to sell, in principle, 
higher volumes at, ideally, better prices (as compared to other third markets). In this 
respect, the Commission explained in recitals (3) to (6) that the Union was an attractive 
market for exporting producers b oth in terms of size and price levels. The import data 
available also showed that imports into the Union had increased rapidly and in great 
volumes in the period where overcapacity was also increasing16 and that they did it at much 
faster pace than Union consumption17, and it also showed that imports to the Union 
continued to increase while the trend of exports to other third countries was the opposite. 
In addition, data in the Provisional Regulation sho wed that exporting producers were 
consistently undercutting Union producers (in some cases significantly), showing their 
determination to remain benefiting from the attractive conditions of the Union market.18 
The magnitude and pace of imports into the Uni on at consistently lower prices than those 
of the Union industry, in a context of a much slower consumption growth, could have hardly 
been reasonably explained in the first place if it were not for a context of increasing 
overcapacity, which was at the cor e of exporting producers ' behaviour.  
(16)  Accordingly, the Commission concluded that imports into the Union increased as a result 
of overcapacity in the steel sector in the original period of investigation.  
2.1.2   Increase of trade defence measures and trade restrict ive measures in 
third  countries  
(17)  In recitals (33) and (34) of the Provisional Regulation, the Commission explained that there 
had been a significant increase in the use of trade defence instruments in the steel sector 
in particular in the years prior to the  initiation of the EU safeguard investigation. The 
Provisional Regulation stated that "whereas during 2011 -2013 on average around 77 
steel-related investigations had been initiated per year, during 2015 -2016 this average 
increased to 117". Furthermore, thi rd countries continued throughout 2017 to impose trade 
restrictive measures.19 
(18)  In overall terms, the Commission observed from the data20 it analysed that more than 300 
trade defence measures on steel products21 had been imposed in the period 2013 -2017.  
(19)  A breakdown of these figures revealed that these measures had been imposed by a large 
number of countries (at least 24 jurisdictions), and among them, all the main steel 
 
16 See OECD "Excess Ca pacity in the Global Steel Industry: The Current Situation and Ways Forward ", 
2015, table at p.2.  
17 Throughout the investigation period imports increased by 71% while consumption increased by 14%.  
18 Specifically, undercutting was established for 17 produc t categories, with ranges between 1,2% 
and 23%.  
19 See recital (33) of the Provisional Regulation.  
20 Source: WTO, Integrated Trade Intelligence Portal (I -TIP) - Extraction made on 
28 November  2018,  10:58.  
21 Covering those steel products under the safeguard measure and excluding the measures imposed by 
the European Union, and those imposed against imports from EU exporting producers. For an overview of the 
TDI measures imposed by the European Union on product categories subject also to the safeguard measure see 
Annex 1.B. of Commission Implementing Regulation (EU) 2019/1382 of 2 September 2019, amending certain 
Regulations imposing anti -dumping or anti -subsidy measures on certain steel products subject to safeg uard 
measures; OJ L 227, 3.9.2019, p.1.  G/SG/N/10/EU/1/Suppl.16  
 
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  importing countries .22 These countries had imposed 157 measures in the period 
2013-2017, i.e. more than 52% of the total.  
(20)  At the same time, the top exporting countries to the Union were, in this period, subject to 
a large am ount of measures in numerous jurisdictions. Taking as an example the top seven 
exporters to the Union23, the Commission observed that they were subject to around 
200 measures, this is, around 66% of the total measures in place in at least 24 different 
third countries.  
(21)  Therefore, the Commission confirmed that the magnitude of the TDI measures, in terms of 
number of individual measures and countries affected (both imposing and subject to the 
measures) was very significant. The Commission further noted that d ata on the original file 
suggested that these figures could be even rather conservative.24 In addition, the duties 
imposed pursuant to those measures appeared to be sufficiently high to impact the level 
of imports entering those markets as compared to the period before these measures were 
in place. This was reflected in an overall decrease in exports from countries subject to TDI 
measures into third markets (see recital (22)), despite the fact that the overall market 
conditions had not changed significantly25and thus would not, in principle, justify a 
reduction of volumes exported of such magnitude if it was not for the effects of the level 
of the meas ures. 
(22)  In this respect, the Commission confirmed based on the data analysed that a common 
effect of the imposition of trade defence measures was the reduction (in many cases 
significant) of imports into the countries subject to measures in the period subseq uent to 
their imposition. In this regard, the Commission observed that, based on an analysis of its 
own TDI investigations on steel products26, imports decreased on average by up to 82% 
when compared to the level of imports in the investigation period that  lead to the imposition 
of measures. In those cases, the volumes of imports affected were significant.27 The 
Commission also confirmed that TDI measures on steel had a similar effect when imposed 
by third countries. In a sample of 26 cases assessed, the Co mmission confirmed that the 
reduction of imports was on average 73%, and that the volumes affected were also 
relevant.28 Therefore, the imposition of TDI measures by third countries reduced the 
volume of exports to those countries, which were, at least par tially, directed to the 
Union  market.  
(23)  Furthermore, another set of data showing the clear connection between the increasing 
number of trade defence measures in third countries and the increase in imports into the 
Union market is the opposing trends of expor ts of the main steel exporting countries to the 
Union explained in recital (5).29 In view of the large amount of trade defence measures 
imposed by t hird countries and the effects they have on the volumes of imports into the 
countries imposing a measure (as detailed in recitals (21) and (22)), this trend confirms 
that their ability to export to third countries was  significantly curtailed. Therefore, they 
sought to dispose of these additional volumes (also affected by overcapacity) into the 
 
22 For reference of the main steel importing countries in the period of investigation, see OECD, "Recent 
developments in steel trade and trade policy measures - A closer look at non -tariff trade measures ",  
DSTI/SC(20 18)3, of 26 January 2018, page 9, table 3. Available at the following link: 
(https://one.oecd.org/document/DSTI/SC(2018)3/en/pdf ). 
23 These countries were (listed alphabetically): China, In dia, Korea, Russia, Taiwan, Türkiye and Ukraine. 
They represented, on average, around 75% of imports of the product concerned into the Union in the 
period  2013-2017.  
24 See recital (76) of EUROFER's submission of 16 April 2018 in the original investigation, linked to more 
granular information on each of the measures considered, provided in Annex A07 D.1. Source of the data: 
SBB Platts.  
25 See CRU data: consumption for years 2017 and 2018 was rather stable (only around 2% increase).  
26 A similar trend was observed when assessing the impact of TDI measures on products other than steel.  
27 Around 15 million tonnes of combined imports affected b y these measures, out of which, only slightly 
more than 2 million tonnes continued entering the market after the measures.  
28 To impose a TDI measure, the volumes concerned by each investigation need to be above de minimis . 
In addition, steel is usually tr aded in rather large volumes as seen in the examples from EU TDI practice and 
from the sampled cases of TDI measures in other third countries.  
29 These countries accounted consistently for around 75% of total imports into the Union in the period of 
investi gation.  G/SG/N/10/EU/1/Suppl.16  
 
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  attractive Union market, which as a result experienced a consistent increase in imports 
over the same period, at a pace substan tially higher than the evolution of consumption.  
(24)  The graph below30 illustrates these trends.  
 
(25)  The Commission also observed that the overall steel consumption did not see any major 
reduction in that period that would explain such a decrease in exports to third countries. 
Hence, the reduction of exports to other third countries could only be reasonab ly explained 
by the limiting effect of the wide array of TDI measures or other trade restrictive measures 
imposed by a large number of jurisdictions.  
(26)  Accordingly, the Commission concluded that the increase in TDI and other trade restrictive 
measures acros s third countries had resulted in increased imports into the Union during 
the period considered.  
2.1.3   US Section 232 measure  
(27)  In recitals (56) to (59) of the Definitive Regulation the Commission explained the link 
between the US Section 232 measures. In addition, in recitals Erreur  ! Source du renvoi 
introuvable.  to Erreur  ! Source du renvoi introuvable.  of the Definitive Regulation, 
the Commission also assessed the evolution of imports into both the Union and US 
markets.31 
(28)  Because the data assessed to determine an increase in imports stopped  at the end of June 
2018 (end of Most Recent Period or "MRP"), it covered import trends into the Union and 
into the US for a relatively short period after the US Section 232 came into effect. 
Nevertheless, as explained in recital (56) of the Definitive Regulation, the investigation 
 
30 Source: For imports into the Union: Eurostat; for TDI measures: WTO, Integrated Trade Intelligence 
Portal (I -TIP). 
31 For the purpose of explaining the link of the US Section 232 and the increased imports, the Commission 
refers, within those recit als, only to the data until June 2018 included. The reason is that the increase in imports 
assessed in the Definitive Regulation covers up to that month.  
G/SG/N/10/EU/1/Suppl.16  
 
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  leading to the US measure had already been initiated in April 2017 and the report setting 
the basis for the later adoptio n of the measure was published in January 2018, and hence 
the first signs of trade diversion were already identified.  
(29)  The data showed that while during the first half of 2018 imports into the US decreased by 
almost one million tonnes ( -7%) when compared t o the same period in 2017, imports into 
the Union followed an almost identical opposite trend, with an increase in imports of 
1.2 million tonnes (+7%).  
(30)  This trend is explained because the main steel exporting countries to the Union also 
exported relevant volumes to the US market. While export volumes to the US were 
decreasing (as a result of the effects of the 25% duty under the US Section 232), the 
volume of exports of some of these countries to the Union increased in parallel. 
Furthermore, and as explain ed in recital (5) above, exports from these countries into other 
third markets generally decreased.  
(31)  Therefore, the impossibility to export in the same amounts to the US after the 
US Section  232 measure entered into force put exporting countries in a situation where 
they were forced to seek other outlets for their steel. In this case, because the 
Union  market was very attractive in terms of size and prices compared to other 
third markets, it was a natural target for exporting countries and this resulted in increased 
imports, notably from origins who lost export volumes to the US. These trends are shown 
in the graphs below.32 
 
 
32 Source: GTA, cumulated exports from Türkiye, Korea, Russia and Taiwan to the United States (graph  2); 
and cumulated exports from the same countries to the USA and the Union (graph 3).  
G/SG/N/10/EU/1/Suppl.16  
 
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(32)  In view of these facts, the Commission confirmed that the increase in imports into the 
Union that took place in the period of investigation was the result (together with the other 
unforeseen developments established) of the US Section 232 measure.  
Cumulative assessment  
(33)  The Commission also concluded that the increase in imports occurred as a result of the 
combination of all the identified unforeseen developments (global overcapacity, increase 
of trade defence measures and trade restrictive measures in third countries and the  
US Section 232 measure). The existence of several unforeseen developments at the same 
time reinforces the finding of a logical connection between the increase in imports into the 
Union, which was an attractive and major market for steel exports, and the i dentified 
unforeseen developments.   
2.2  Threat of serious injury  
(34)  The original determination established that if the Union did not impose a safeguard 
measure, there was a threat of serious injury for the domestic producers as imports were 
expected to continue increasing, notably due (but not limited) to trade diversion originating 
in the US Section 232 measure, and thus to add import pressure in terms of price and 
volumes33. This section of the Regulation will develop in further detail why a threat of 
serious i njury existed and was well founded in light of the evidence available at the time 
of the imposition of the definitive measure. To do so, this section of the Regulation will 
provide additional explanations and clarifications on the following aspects leading  to the 
finding of a threat of serious injury: i) situation of the Union industry and reasons explaining 
its partial recovery in 2017; ii) role of EU TDI measures in the situation of the Union 
industry; iii) impact of US Section 232 measure – including rec ent import evolution into 
the Union; iv) most recent evolution of steel and raw material prices; v) state of play of 
TDI measures in third countries and overcapacity; vi) market outlooks and forecasts.  
Continuous attractiveness of the Union market  
(35)  In reci tals (3) to (6) above, the Commission e xplained how the Union market was attractive 
in terms of size and prices and how these features contributed to an increasing amount of 
imports into the Union market in the period of investigation.  
 
33 See recitals (90) and (110) of the Definitive Regulation.  
G/SG/N/10/EU/1/Suppl.16  
 
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  (36)  The Commission 's considered that these features remained t he same at the end of the 
investigation that led to the imposition of the definitive safeguard, confirming that in 2018, 
the Union market continued to be an attractive market in terms of size34 and prices. The 
main steel exporting countries to the Union ac hieved a higher price in the Union market as 
compared to the export prices achieved in other third markets for 48% to 81% of the 
CN codes concerned.35 Thus confirming the continuous attractiveness in terms of prices. 
Regarding size, the Union continued to be a relevant export market, representing for some 
exporting countries almost 40% and for some of them around 25% of their total exports, 
depending on  the exporting country .36  
(37)  Furthermore, the Commission concluded that there were no elements among the data 
assessed, including submissions from interested parties, indicating that the Union market 
would become any less attractive in the near future. In fa ct, as shown in this Annex (see 
as an example subsections 2.2.3 and 2.2.5. below) there was an increasing lack of 
alternative outlets where exporting producers could reach the same or similar volumes of 
exports as they did in the past, and as a result the import pressure on the attractive 
Union  market would increase even further.  
2.2.1   Situation of the Union industry and factors explaining its partial recovery in 2017  
(38)  Section VI.1 of the Provisional Regulation and Sections 5.1 to 5.3 of the Definitive 
Regulation explained the situation of the Union industry at the end of the period analysed, 
and the evolution of the injury indicators since 2013, concluding that Union industry was 
in a fragile and vulnerable position.  
(39)  The finding of vulnerability despite  a partial improvement in 2017, was explained by a 
number of factors that allowed the Union industry to reach, only in 2017, overall healthier 
levels of profitability than in previous years despite continuous increasing imports .37 
(40)  First, the profitability of the Union industry throughout the period analysed showed a 
generally poor performance, incurring losses (2013) or achieving very low level of profits 
(2014 -2016). While in 2017 the industry achieved for the first time in a period of five years 
a healthi er level of profitability, this did not reach a magnitude that would make up for the 
previous performance over a four -year period. Even on that year, for a large number of 
product categories, profitability remained low. Three product categories remained lo ss 
making and 13 product categories close to break -even.  Only seven product categories 
could recover to a level of profit above 6 % in 2017 .38 In this respect, a key different factor 
in 2017 related to the evolution and level of its unit sales prices and t he difference with the 
cost of production compared with that of previous years. Regarding the price, in 2017 it 
increased by around 18% with respect to the previous year ( EUR 106/tonne increase). At 
the same time, even if the cost of production also increa sed in that year (by  EUR 82/tonne 
compared with the previous year)39, the Union industry was able to achieve the biggest 
(positive) margin between the two in the period analysed ( EUR 36/tonne), which resulted 
in higher profitability .40 However, this except ional41 situation was, according to the most 
recent developments analysed in the investigation not expected to be of a long -lasting 
nature and there were clear trends showing that it was already reversing (see 
Section  2.2.3  ). 
 
34 See OECD Steel Committee – Recent developments in steel trade and trade policy measures, 
17-18 Septem ber, 2018, p.8, Table 2 (showing that in 2018 Union was consolidating further its position as main 
steel importing country worldwide).  
35 Source: DG TRADE calculations on Global Trade Atlas data ( https://ihsm arkit.com/index.html )– 
raw data available upon subscription.  
36 Ibid 
37 Imposition of TDI measures on some product categories also contributed to this improvement, but their 
specific role is analysed in Section 3.2.2.  
38 Recital (53) of the Provisional Regul ation.  
39 See Table 15 of the Definitive Regulation.  
40 These trends were assessed for the product concerned, and not for individual product categories.  
41 Based on a comparison of all the years in the period analysed.  G/SG/N/10/EU/1/Suppl.16  
 
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  (41)  Second, while the Union industry was able to increase its volume of sales in overall terms 
by 7% in 2017 when compared to 201342, contributing to improving partially its 
perform ance in that year, it was clearly unable to fully benefit from a much higher increase 
in consumption in the same period (+14%)43 in the Union market although it continued to 
have sufficient capacity available in 2017 (76% in 2017 of capacity utilisation compared to 
75% in 2016)44 to increase its domestic sales further. It is noteworthy that the 
Union  industry barely improved its ca pacity utilisation in 2017 compared with the previous 
year. Such suppressed performance could be explained by the significant increasing import 
pressure (in terms of volumes and prices) that the Union industry suffered in the period 
assessed. In fact, impo rts benefitted to a much larger extent than Union producers from 
the increase in consumption. While Union producers lost market share consistently year -
on-year (from 87,2% to 81,9%)45 imports experienced a drastic increase (+71%)46, 
representing an increas e in their market share from 12,7% in 2013 to 18,8% in 2017 .47 
The market share of imports in the MRP was 18,8%, which was even higher than in 2017 
(18,1%). These trends could be explained by the consistent undercutting of imports48, 
which thus prevented t he Union industry from realising either the full (or at least a greater) 
potential of market developments.  
(42)  Third, while market conditions overall improved (with increased consumption, domestic 
sales and price levels), the Union industry was still unable t o translate this into more 
employment, which had suffered the loss of nearly 10 000 workers in the Union in the 
period 2013 -2017.49 In 2017 employment level even decreased very slightly compared to 
2016. Lastly, stocks grew by 19% over the investigation pe riod and remained high in 
2017.50 
(43)  Therefore, the Union industry improved partially its performance in 2017 as a result of a 
combination of factors, notably the increase in consumption and of domestic sales and the 
higher difference between steel and raw ma terial price51 but this improvement was 
nevertheless limited by the degree of import pressure suffered in that year, which did not 
allow the Union industry to benefit to a greater extent from such existing factors. The 
continuous loss of market share and t he persistent undercutting across product categories, 
or the jobs that it was not able to recuperate, were clear signs that its situation was not 
that of an industry that had fully recovered from the effects of previous negative 
performances in previous ye ars, and that import pressure was playing a key role in 
impeding such recovery.  
(44)  Therefore, since some of these factors that developed positively in 2017 were reversing 
in 2018 (see below latest developments and expected performance for steel and 
raw mater ial prices, as well as expected trends in consumption) in a situation where import 
pressure was expected to increase in terms of volumes and prices, the impact on the 
financial situation of the Union industry would be negative.  
(45)  In other words, while the U nion industry was able partially recover due to the cumulated 
positive developments of a series of key factors in the market and to slower increase of 
imports in 2017 compared with previous years52, the negative turn that most of these 
factors were showing  at the end of 2018 would necessarily result in a worsening of the 
Union industry 's situation against the ongoing further increase of import pressure, which 
this time, due to its magnitude and the expected prevailing market context, the 
 
42 See Table 4 of the Definitive Regulation.  
43 Ibid 
44 See Table 5 of the Definitive Regulation.  
45 See Table 4 of the Definitive Regulation.  
46 See Table 2 of the Definitive Regulation.  
47 Ibid 
48 See Annex III of the Provisional Regulation.  
49 See Table 7 of Definitive Regulation.  
50 See Table 5 of the Definitive Regulation.  
51 See Section 3.2.2. for the explanation of the role of recent TDI measures in the Union industry 's 
performance in 2017.  
52  Total imports increased by less than 1 million tons and market share went up from 17,9 % to 18,1% 
from 2016 to 2017, which is less than previous year -on-year increases both in absolute and relative terms.  G/SG/N/10/EU/1/Suppl.16  
 
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  Union  industry woul d not be able to sustain. As a result, the situation of the Union industry 
at the end of the investigation period was that of vulnerability to a further surge in imports.  
Role of Union TDI measures in the situation of the Union industry in 2017  
(46)  The Panel Report considered that the role played by TDI measures on the recovery of the 
Union industry in 2017 should have been explained in more detail. In this Section the 
Commission provides the necessary additional explanations and supporting data.  
(47)  In the first place, to carry out this exercise, the Commission selected those measures 
imposed in the years 2015 and 2016 because the Commission considered that those would 
be the measures whose effects on the Union industry 's performance in 2017 could be 
partially att ributed to .53 Therefore, under these parameters, prior to 2017 the Commission 
had imposed six TDI measures on imports from product categories which were 
subsequently subject to the safeguard measure .54 
(48)  These measures were the following55: Commission Implementing Regula tion (EU) 
2015/50156, Commission Implementing Regulation (EU) 2016/18157, Commission 
Implementing Regulation (EU) 2016/177858, Commission Implementing Regulation (EU) 
2016/11359, Commission Implementing Regulation (EU) 2016/177760 and Commission 
Implementing Regulation (EU) 2017/969 .61 
(49)  The Commission observed that the profitability of Union producers in these product 
categories systematically improved in the year following the imposition of measures. In 
particular, the Commission f ound that, in 2017, profitability generally improved,62 although 
for a large number of category products profitability remained low, in particular for the 
product categories subject to recent TDI measures, and that import prices of third countries 
(other t han those subject to the TDI measures in question) generally increased temporarily 
in 2017 following the imposition of the TDI measures .63  
 
53 In this regard the Commission considered that, for  instance, a TDI measure imposed in 2013 would be 
too far in time to be connected to the Union 's improved performance in 2017, and therefore, the selected 
measures offer a more accurate and appropriate basis for the analysis.  
54 In some cases the scope of a  TDI measure on a certain product, in terms of CN codes covered, may 
not match entirely the product definition of the corresponding product category under the safeguard measure, 
thus  this assessment is an approximation.  
55 These references to these regulations pertain to the regulations imposing a provisional measure, 
because for practical purposes, as long as a duty (provisional or definitive) was in place, it was assumed to have 
a similar impact on the volumes traded. In all these cases, the invest igation resulted in the imposition of a 
definitive measure.  
56 Commission Implementing Regulation (EU) 2015/501 of 24 March 2015 imposing a provisional anti -
dumping  duty on imports of stainless steel cold -rolled flat products originating in the People's Re public of China 
and Taiwan, OJ L 79, 25.3.2015, p. 23.  
57 Commission Implementing Regulation (EU) 2016/181 of 10 February 2016 imposing a provisional 
anti-dumping duty on imports of certain cold -rolled flat steel products originating in the People's Republi c of 
China and the Russian Federation; OJ L 37, 12.2.2016, p. 1.  
58 Commission Implementing Regulation (EU) 2016/1778 of 6 October 2016 imposing a provisional 
anti-dumping duty on imports of certain hot -rolled flat products of iron, non -alloy or other alloy  steel originating 
in the People's Republic of China, OJ L 272, 7.10.2016, p. 33.  
59 Commission Implementing Regulation (EU) 2016/113 of 28 January 2016 imposing a provisional 
anti-dumping duty on imports of high fatigue performance steel concrete reinforce ment bars originating in the 
People's Republic of China, OJ L 23, 29.1.2016, p. 16.  
60 Commission Implementing Regulation (EU) 2016/1777 of 6 October 2016 imposing a provisional 
anti-dumping duty on imports of certain heavy plate of non -alloy or other alloy  steel originating in the People's 
Republic of China, OJ L 272, 7.10.2016, p. 5.  
61 Commission Implementing Regulation (EU) 2017/969 of 8 June 2017 imposing definitive countervailing 
duties on imports of certain hot -rolled flat products of iron, non -alloy o r other alloy steel originating in the 
People's Republic of China and amending Commission Implementing Regulation (EU) 2017/649 imposing a 
definitive anti -dumping duty on imports of certain hot -rolled flat products of iron, non -alloy or other alloy steel 
originating in the People's Republic of China, OJ L 146, 9.6.2017, p. 17.  
62 Source: DG TRADE analysis of the injury indicators published in the relevant measures and analysis of 
the questionnaire replies provided by the Union industry per product category i n the framework of the original 
safeguard investigation.  
63 Source: Eurostat  G/SG/N/10/EU/1/Suppl.16  
 
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  (50)  Furthermore, the volumes affected by the recent trade defence measures represented 
around 40% of total imports withi n the product categories subject to recent TDI measures 
in the period considered64 and in the years following the imposition of those TDI measures 
their volumes in the Union market went down by more than 90% .65 Therefore, the 
substantial reduction of unfai r traded imports that ensued the imposition of measures 
generally allowed Union producers and other exporting countries to increase their sales 
prices in 2017.  
(51)  Moreover all product categories subject to recent trade defence measures experienced a 
signific ant improvement in profitability66, several of which exceeded 6% in 2017 .67 For the 
rest of categories, the picture was more diverse, with few categories exceeding or reaching 
close to 6% profitability68, other categories improving but still showing weak o r low 
profitability levels69, and others loss -making or around 1% profitability70, irrespective of 
the recent trends. Thus showing that the picture in terms of evolution of profitability was 
not homogeneous among categories and that in overall terms, most categories71 were, in 
2017, either loss making or with unhealthy levels of profitability, even if their situation had 
improved in some cases as compared to the previous year. Thus confirming the fragility of 
the overall situation of the Union industry desp ite the situation being better than the 
preceding year.  
(52)  However, as explained below, the trend of increasing pricing in 2017 was temporary and 
started reversing in 2018 when the Union was faced with a surge in imports mainly from 
third countries not subjec t to trade defence measures and the trade diversion caused by 
the US Section 232 measure. This is shown by the volume of imports in the MRP that 
reached a record figure of 31 314 tonnes despite the imposition of recent trade defence 
measures in some produc t categories. This showed that while recent TDI measures 
contributed to the partial and temporary improvement of the Union industry, they also 
benefitted those exporting countries not subject to measures, which had also started to 
increase significantly th eir presence in the Union market .72  
(53)  Hence, the Commission confirmed that the imposition of TDI measures contributed to the 
overall performance of Union producers, insofar as these categories were concerned .73 
(54)  In addition, the reasoning in sections 2.2.1   and 0 clearly showed that some factors 
explaining the partial recovery of the Union (e.g. consumption) did not affect or benefit 
Union producers and exporting countries equally or similarly, as the  latter were able to 
increase greatly (+71% in volumes) their presence in the Union market at the expense of 
Union producers which lost market share, and only saw a relatively modest increase in 
overall sales volumes (+7%) when compared to the continuous g rowth of imports.  
 
64 The sum of imports subject to TDI measures by these investigations (although they concern different 
periods of investigation and different years, e.g. 2013 to 2015) was slightly above 5 million tonnes.  
65 Source: DG TRADE analysis of its own TDI cases for the volume of imports in the relevant investigation 
period, and Eurostat for import figures following the investigation period of each of these investigations for this 
implementat ion. 
66 Categories 1, 2, 7, 9, 12 and 13.  
67 Categories 1, 2 and 9.  
68 See categories 4, 8 and 14.  
69 See categories 5, 6, 15, 16 and 26  
70 See categories 3, 17, 18, 20, 21, 22, 23, 25 and 28.  
71 At least fifteen categories out of a total of twenty three subject to a provisional measure (for which a  
breakdown was provided in Annex III of the Provisional Regulation.  
72 For instance,  Türkiye increased its presence in the Union market in category 1, where China was made 
subject to TDI measures in October 2016,  from 1 062 247 million tonnes in 2016 to 2 million tonnes in 2017 
(and nearly 3 million tonnes in 2018.  In the same vein, India increased from 443 551 tonnes to 
1 121 334 million  tonnes in 2017, or Egypt, from 47 400 tonnes in 2016 to 409 432 tonnes in 20 17). 
73 Section 3.2.1. explained the reasons behind the overall improvement of the Union industry regarding 
the product concerned.  G/SG/N/10/EU/1/Suppl.16  
 
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  2.2.2   Impact of US Section 232 measure  
(55)  In the Definitive Regulation74 the Commission reached the conclusion that the 
US Section  232 would be liable of significant trade diversion into the Union market.  
(56)  In this respect, the Commission has conducted a more detailed analysis of the import 
patterns into the Union and the USA, both in overall terms and then further analysing the 
behavi our of certain exporting countries. This analysis showed that when comparing the 
imports into the US and into the Union in the first half of 2018 with the first half of 2017, 
imports into the US decreased by almost one million tonnes ( -7%) when compared to  the 
same period in 2017, imports into the Union followed an almost identical opposite trend, 
with an increase in imports of 1.2 million tonnes (+7%) (See recital (29) above). When 
assessing the developments in the second half of 2018 and the same period in 2017, these 
opposing trends become more acute. In fact, imports into the US decreased by 
2.4 million  tonnes ( -19%) while imports into the Union i ncreased by more than 
2 million  tonnes (+15%) .75 
(57)  This resulted in an overall yearly reduction of imports into the US of 3.3 million tonnes 
(-13%) and an increase of imports into the Union of 3.2 million tonnes (+11%), out of 
which 72% of the total volumes reduced into the US and 63% of the imports increase in 
the Union took place in the second half of 2018 .76 
(58)  Therefore, the pace and magnitude at which these trends of imports accelerated in the 
second half of 2018 showed that the impact of the US Section 232  measure was taking 
progressively more effect as it had been in place already for a few months, and that 
exporting countries were rapidly adjusting to the new market situation .77 
(59)  Zooming in into the behaviour of exporting countries to both the US and EU ma rket, the 
Commission confirmed this trend. For instance, countries like Türkiye, Russia, South Korea 
and Taiwan78, which accounted for significant volumes of exports to the US and to 
the Union, saw the following trends in 2018 when compared to 2017: Türkiy e decreased 
its exports to the US by around 850 000 tonnes ( -45%) and it increased its exports to 
the Union by 2.6 million tonnes (+56%). Similarly, Russia 's exports to the US went down 
by more than 250 000 tonnes ( -36%) and increased by 870 000 tonnes (+23%) in 
the Union, South Korea 's exports to the US decreased by more than 880 000 tonnes 
(-27%) while increasing in the Union by around 250 000 tonnes (+8%), and lastly Taiwan 's 
exports went down by around 160 000 tonnes ( -14%) while increased by more than 
500 000 tonnes (+40%) in the Union .79  
 
74 See recitals (57) to (62), and Table 12 of the Definitive Regulation.  
75 To put this volume into context, a basic calculation  taking the average steel price in the Union in 2017 
shows that the EU industry could lose out on around EUR 1.4 billion worth of domestic sales at the expense of 
these additional imports. Thus showing that the potential impact of these additional sales wa s relevant.  
76  Whereas the increase in imports into the Union from 2016 to 2017 was much smaller, around 
1 million  tonnes.  
77 See also OECD Steel Committee – Recent developments in steel trade and trade policy measures, 
17-18 September, 2018, p.8, Table 2.  
78 At the time of the adoption of the definitive safeguard measure, only the following four TDI measures 
affecting imports into the Union were in place (three against Russia and one against Taiwan): Commission 
Implementing Regulation (EU) 2017/1795  of 5 October 2017 imposing a definitive anti -dumping duty on imports 
of certain hot -rolled flat products of iron, non -alloy or other alloy steel originating in Brazil, Iran, Russia and 
Ukraine and terminating the investigation on imports of certain hot -rolled flat products of iron, non -alloy or other 
alloy steel originating in Serbia, OJ L 258, 6.10.2017, p. 24. Commission Implementing Regulation (EU) 
2016/1328 of 29 July 2016 imposing a definitive anti -dumping duty and collecting definitively the provisio nal 
duty imposed on imports of certain cold rolled flat steel products originating in the People's Republic of China 
and the Russian Federation, OJ L 210, 4.8.2016, p.1. Commission Implementing Regulation (EU) 2018/1469 of 
1 October 2018 imposing a definit ive anti -dumping duty on imports of certain seamless pipes and tubes, of iron 
or steel, originating in Russia and Ukraine, following an expiry review pursuant to Article 11(2) of Regulation 
(EU) 2016/1036 of the European Parliament and of the Council, OJ L  246, 2.10.2018, p. 20. Commission 
Implementing Regulation (EU) 2015/1429 of 26 August 2015 imposing a definitive anti -dumping duty on imports 
of stainless steel cold -rolled flat products originating in the People's Republic of China and Taiwan, OJ L 224, 
27.8.2015, p. 10.  
79 Source: for US imports (GTA); for EU imports (Eurostat).  G/SG/N/10/EU/1/Suppl.16  
 
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  (60)  Therefore, these figures showed that exporting producers were generally able to ship, at 
least part of the volumes lost in the US, to the Union market, and in some cases to increase 
their presence in the Uni on market well above the volumes lost in the US. Given the size 
of the US market80, the fact that the US Section 232 measure was still in its first months 
of application and hence had not yet reached its full intended effects,81 it was reasonable 
to expect  that the exports to the US would continue to decrease in significant volumes and 
that exporting producers would be able to adapt to these circumstances and increase their 
presence in the Union market even further.  
(61)  Therefore, the Commission confirmed that the US Section 232 measure was liable to cause 
an even greater trade diversion of exports into the Union market in the near future.  
2.2.3   Most recent evolution of steel and raw material prices  
(62)  In the Definitive Regulation the Commission noted that "steel prices in the Union started 
to follow a declining trend since the third quarter of 2018 ".82  
(63)  In this respect the Commission observed in section 2.2.1   above , that one of the factors 
that explained a partial improvement in the Union industry 's performance in 2017 was that 
the difference between steel price and raw material cost was higher than in any of the 
previous years of the period analysed. However, a fur ther detailed analysis of the most 
recent developments prior to the imposition of a definitive measure showed that the trend 
was reversing and that the positive difference between the two was squeezing 
progressively, and therefore that would have a negativ e impact on the economic 
performance of the Union industry.  
(64)  As shown in the graph 4 below83, steel prices in the Union saw a steady decline in the 
second half of 2018. This trend could be expected to continue in light of the uncertain 
market prospects (se e Section 2.2.6.) and as a result of the continuous and increasing 
import pressure in terms of volumes and prices, which against a worsening or uncertain 
market conditions, would likely have a downwards effect on prices, thus not allowing Union 
industry to  adapt its prices to the increased costs. In the graph 584 it is observed how the 
price of some of the main steelmaking raw materials were increasing constantly over the 
same period.  
 
80 The US steel market was among the top import destinations by size - See OECD, "Recent Developments 
in Steel Trade and Trade Policy Measures ", DSTI/SC(2018)3, p.9, table 3.   
81 See recital (37) of the Provisional Regulation: "The U.S. have calculated that the imposition of a single 
across product tariff under the Section 232 measures with almost no country exclusion should decrease imports 
by approximately 13 million tonnes – corresponding to 7 % of Union consumption US domestic developing 
capacity. " Also, see examples of US Industry capacity expansions . 
82 See recital (89) of the Definitive Regulation.  
83 Source: Eurostat for import prices, and S&P Global Commodity Insights  for prices of HDG and HRC.  
84 Source: S&P Global Commodity Insights . G/SG/N/10/EU/1/Suppl.16  
 
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(65)  Therefore, such combined trends, for which there were no signs of re versal in the near 
future, would put the Union industry in an even more strained financial situation.  
(66)  In addition, the Commission considered that in a likely scenario of further import pressure 
and in a market that was not to experience any significant growth, the trends of 
undercutting domestic prices identified in the original investigation would exacerb ate 
G/SG/N/10/EU/1/Suppl.16  
 
- 17 - 
 
  further. Thus creating additional difficulties to Union producers who would face the decision 
either to compete for market share, at the expense of more sustainable prices, or to 
preserve a higher level of prices at the expense of continuing to lose ma rket share. In both 
scenarios, its financial performance would be negatively impacted.  
(67)  Furthermore, the Commission noted that this evolution in prices coincided with the period 
when a provisional safeguard measure was already in place (since mid -July 2018) . 
Therefore showing that exporting countries were having an even more aggressive import 
behaviour under the measure, and showing their continued interest to enter the Union 
market in large volumes despite a provisional safeguard measure being in place.  
2.2.4   State of play of TDI measures in third countries and overcapacity  
(68)  In Sections 2.1.1   and 2.1.2    the Commission explained the evolution and more recent 
situation of overc apacity and TDI measures in third countries. In view of that information, 
the Commission considered that it was highly unlikely that there would be a reversal of the 
existing situation in the near future. For instance, TDI measures are usually imposed for a 
period of five years, and they can be prolonged further. In particular, because many of the 
measures had been imposed within the few years prior to the adoption of the EU steel 
safeguard measure85, they were set to continue in place a least for the immed iate future. 
Regarding overcapacity, the reports referred to by the Commission did not indicate that 
there were signs that overcapacity was going to go down to any significant extent, if 
anything, they suggested that the situation of global overcapacity in  the sector could even 
deteriorate further .86 In fact, the Global Forum of Steel Excess capacity was also very clear 
in concluding that overcapacity continued to be an ongoing problem in late 2018. It noted, 
"Excess steelmaking capacity – a global challeng e that continues to plague the sector – 
creates significant difficulties for steel producers in advanced, emerging and developing 
economies alike ".87 
(69)  The proven effects that these factors had caused in the Union market in the form of 
substantial increase i n imports were detailed in Section 2.1   above, as well as in the 
Definitive Regulation. As they were set to continue in place in the near future, the ir effects 
were thus expected to be of the same nature and therefore, together with the 
U.S Section  232 measure would generate a further increase of imports into the Union, with 
ensuing negative effects on the Union industry, if no safeguard measure was im posed.  
(70)  Therefore, the Commission concluded that these elements would continue to play an 
important role in the Union steel market in the near future and were thus pertinent for the 
analysis of a threat of serious injury.  
Market outlooks and forecasts  
(71)  Throughout the period analysed, consumption of steel in the Union market increased 
year-on-year.88 This trend allowed the Union industry to, generally, also increase its 
volume of sales, which in turn allowed it to alleviate to some extent the effects of the 
import pressure it was subject to and showed by the persistent undercutting and steady 
loss of market share. As explained in Section 2.2.1   , in 2017 this increase in sales in a 
context of a recovery in prices (both in overall terms and when co mpared to evolution of 
costs) allowed to the Union industry to partially recover from a consistent negative financial 
 
85 Around 140 of the investigations that led to the adoption of measures were initiated in the year 2015 
or later, hence their duration was set to be in place, in principle, until at least 2021 (this is, at least two years 
after the conclusion of the EU safeguard investigation). Source: WTO, Integrated Trade Intelligence Portal (I -
TIP).  
86 See OECD, "Recent Developments in Steelmaking Capacity ", DSTI/SC(2018)2/FI NAL: "the updated 
information on announced investment projects suggests that nearly 52 million tonnes of gross capacity additions 
are currently underway and could come on stream during the three -year period of 2018 -20. An additional 
39 million tonnes of ca pacity additions are currently in the planning stages for possible start -up during the same 
time period ". 
87 Global Forum on Steel Excess Capacity, Ministerial Report, 20 September 2018, paragraph 2.  
88 Definitive Regulation, table 4.  G/SG/N/10/EU/1/Suppl.16  
 
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  performance in previous years. In Section 2.2.3  , the Commission observed a downward 
trend in steel prices in the Union parallel to an increase in raw material prices.  
(72)  The Commission then assessed the economic outlooks and forecasts for the period that 
would follow the conclusion of t he investigation in order to assess the existence of a threat 
of serious injury, analysing a variety of specialized market sources.  
(73)  In this regard, sources consistently pointed to a scenario of uncertainty and cooling down 
of worldwide steel demand in the near future. Worldsteel Association noted, "deceleration 
in steel demand will continue into 2019 (…). No deal Brexit and trade war pose risks ".89 It 
also recalled, "While the strength of steel demand recovery seen in 2017 was carried over 
to 2018, risks ha ve increased. Rising trade tensions and volatile currency movements are 
increasing uncertainty ".90 
(74)  The OECD noted, "recovery (of steel market conditions) looks fragile because of persistent 
structural imbalances ".91 Other market sources like S&P Global Pla tts echoed this 
uncertainty sentiment in its Global Market Outlook of December 2018.  
(75)  Moreover, the Global Forum on Steel Excess Capacity concluded in September 2018 "While 
steel market conditions have shown some cyclical recovery in 2017, the underlying tr end 
in global steel demand remains weak and excess capacity remains significant. "92 
(76)  In the same vein, Eurofer (an EU Steel Association), noted "(…) ongoing trade frictions with 
the US, and cooling global demand, suggest that external risks could continue t o climb, 
which in turn would increase uncertainty and lead to weakening prospects for EU steel 
users ".93  
(77)  Therefore, the data analysed from a variety of sources consistently showed that the 
expectation was that at best, a modest increase in steel consumption would take place 
although this was not even certain as prospects were deteriorating amid growing 
uncertainty. As a result, the stagnating global steel demand would make it even more likely 
that steel exporters would sell into the attractive Uni on market.  
Conclusion on threat of serious injury  
(78)  The data analysed in this Section confirmed that imports were very likely going to increase 
in relevant volumes and that import pressure was thus going to continue, both on volumes 
and prices, as a result o f the persistent overcapacity and the increasing number of 
TDI measures in third countries, whose effects on exports would continue. In addition, the 
effects of the US Section 232 would very likely be felt more strongly as months passed by, 
thus adding fur ther pressure to the Union market through an increased risk of trade 
diversion, the first signs of which had already materialised.  
(79)  Against this background, the Commission also confirmed the opposing trends of steel and 
raw material prices in the second half of 2018, and the uncertain market outlook for the 
near future.  
(80)  Therefore, in view of the elements analysed in this Annex, togeth er with the findings in the 
original determination the Commission confirmed that there was a threat of serious injury 
and that such serious would have materialised if the Commission had not imposed a 
definitive safeguard measure.  
 
89 See Worldsteel Association – Global Steel Market Outlook – OECD Steel Committee Meeting, 
17 September, 2018.  
90 See Worldsteel Association - Worldsteel Short Range Outlook October 2018, Press Release.  
91 See OECD Steel Market Developments, 85th Session of the S teel Committee, September 2018. See also 
pages 7 and 8 of OECD Global Economic Outlook, 17 September 2018, showing a downwards revision of growth 
expectations (also in the Union), and that "global trade had slowed amid growing trade policy uncertainties ". 
92 Global Forum on Steel Excess Capacity, Ministerial Report, 20 September 2018, paragraph 2.  
93 See EUROFER – Economic and Steel Market Outlook 2018 -2019, 25 October 2018.  G/SG/N/10/EU/1/Suppl.16  
 
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  2.3  Obligations whose effect r esulted in the increase in imports  
(81)  In its report, the Panel ruled that the safeguard measure was inconsistent with 
Article  XIX:1(a) of the GATT 1994 because the European Commission had not identified in 
its published reports the obligations whose effect re sulted in the increase in imports.94  
(82)  Article XIX:1(a) of the GATT 1994 stipulates, in relevant part: "[i]f, as a result … of the 
effect of the obligations incurred by a [Member] under this Agreement, including tariff 
concessions, any product is being impo rted into the territory of that [Member] in such 
increased quantities …".  
(83)  The product  in question comprises several tariff lines .95 
(84)  On these tariff lines, the European Union has tariff commitments, as a result of tariff 
concessions made in past rounds of multilateral trade negotiations, as follows:  
 - 0 % on all tariff lines  
(85)  These concessions were inscribed, at the time of the safeguard determination, in Part I, 
Section II of the European Union 's Schedule of Concessions and Commitments, certified as 
Sched ule EU CLXXIII – European Union on 1 December 201696, as amended. The column 
for "other duties and charges" in that Schedule and regarding the above tariff lines was 
empty.  
(86)  As a result of these concessions inscribed in the European Union 's Schedule of Con cessions 
and Commitments, annexed to the GATT and incorporated pursuant to Article II:7 of the 
GATT 1994, the European Union had, at the time of the safeguard determination, 
obligations incurred under the GATT 1994  notably as follows: Article XI:1, prohibi ting 
non-tariff restrictions on the importation of the above -listed products, and, importantly, 
Article II:1(a) and Article  II:1(b), first and second sentences, of the GATT 1994. Under 
Article  II:1(b), first sentence, the EU is not allowed, absent an appli cable exception, to 
impose ordinary customs duties on the product in question in excess of those set forth and 
provided in the relevant part of the EU 's Schedule of Concessions and Commitments, i.e. 
the maximum rates pointed out above for each of the tarif f lines covered. At the time of 
the original safeguard determination as well as of the imposition of the definitive safeguard 
measure, the EU 's applied import tariffs on the product covered by the safeguard was, 
depending on the tariff line in question, re spectively. In other words, for ordinary customs 
duties, these applied tariffs were already the maximum permitted under Article II:1(a) and 
Article  II:1(b), first sentence, of the GATT 1994. As for other duties or charges, no flexibility 
existed under Arti cle II:1(b), second sentence, for introducing additional other duties or 
charges than ordinary customs duties.  
(87)  The product subject to the safeguard was being imported in increased quantities (as 
established in the definitive safeguard) as a result  of the above obligations undertaken 
under the GATT 1994 (Article XI:1, Article II:1(a) and II:1(b), first and second sentences, 
of the GATT 1994), because those obligations, combined with the tariff concessions which 
the European Union made in the successive roun ds of multilateral trade negotiations, 
enhanced and secured the conditions of market access for imports of the product subject 
to the safeguard on the market of the European Union. The above -mentioned tariff 
commitments of the European Union thus resulted in the increase in imports and gave no 
leeway for the EU to increase ordinary customs duties in lieu of introducing a safeguard 
measure. This simultaneously explains how the obligations in question resulted in the 
increase in imports that threatened to cau se serious injury.  
 
94 Panel Report, paras. 7.169, 7.170, 8.1(a)(i).  
95 See Annex I to the Definitive Reg ulation.  
96 WTO doc. WT/Let/1220 . G/SG/N/10/EU/1/Suppl.16  
 
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  (88)  The GATT obligations specified simultaneously prevented the EU from increasing the 
applied import duties on the product at issue. These were thus, to use the language of the 
panel, the European Union 's "obligations of the GATT 1994 [whic h] constrain[ed] its ability 
to prevent or remedy injury from an increase in imports". Concomitantly, the European 
Union "suspend[ed] those obligations as a result" of its safeguard measure .97 
 
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97 Panel Report, para. 7.168.