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DOCUMENTS "COM"
COM (81)359
Vol.1981/0112

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)359final
Brussels,2j#.t!iJune1981
/■r-'yino
ν.V
STEEL
ConsultationoftheConsultative Committeearidrequestfor
theCouncil'sassenttotheinclusionofreinforcingbars
andmerchantbarsinthenewsystemofproductionquotas
C0PK81)359final

MOTIVATION
AstheCommission .announced atthemeeting on24June ,itwill
submit tothe Council arequest forthe Council 'sassent tothe
inclusion ofreinforcing bars andmerchant bars inthesystem
ofproduction Quotas .

Inthedocument requesting the Council 'sassent tothe introduction of
asystem ofproduction quotas forcoils andderived products of25May
1981 theCommission didnotexpress adefinite view onthesystem tobe
applied toproducts ofCategory IV(wire rod,reinforcing bars andmerchant
bars )ofthesystem ofproduction quotas inforce since 1October 1980 ,
because ofthepossibilities which still existed toarrive ,forthewhole
ofthis category ,atavoluntary system ofproduction restraint .
Infact ,theCommission judged that even ifthedemand forthese products
remained weak ,areturn tovoluntary anti-crisis measures should beintro - .
duced ifitwere assured that theproducers would accept thevoluntary
production anddelivery quotas which theCommission suggested tothem .
Atits session on4June 1981 the Council had invited the Commission to
attempt yetagain toestablish thebases -necessary for avoluntary arrange­
ment for these products .
From thecontacts which theCommission hashad andthe reports which have been .
presented toitinthemeantime bythe producers ,itappears "that ithasbeen possible
todefine thecriteria for avoluntary system forthethird quarter as
regards wire rod .Ontheother hand ,asregards reinforcing bars andmerchant
bars ,ithasnot been possible toestablish abasis foragreement .
Themarket situation asitwaspresented intheabovementioned document
hashotimproved ,onthecontrary itappears that ,onthebasis ofthe latest
order bookings and recent information concerning themarket -evolution in
theprincipal consumption sectors forthese products ,inparticular the
«
sector ofconstruction ,that this market islikely todeteriorate further
inthefollowing months . »
This situation wasaggravated ,among others ,bythescrap price which
registers acertain increase while theprice forreinforcing bars andmerchant
bars remains atavery weak level . 1

2
Reinforcing bars and merchant bars represent animport part ,oftheorder
of25%,ofthetotal production ofrolled products intheCommunity ™In
certain traditional regions this proportion iseven considerably higher .,
Itshould also benoted that agreat number ofsmall andmedium-sized
enterprises depend entirely onthese twoproducts .
Theabsence ofaquantative discipline inasituation ofweak demand could
provoke very severe consequences fortheCommunity steel industry and
compromise theobjectives oftheTreaty ,particularly Article 3.Inthese
conditions theCommission isoftheview that asystem found onArticle
58/ECSC isrequired forreinforcing bars andmerchant bars
Asregard wire rod,avoluntary system covering asufficiently representative
number ofproducers hasbeen established for aquarter ;itistherefore no
longer necessary toinclude this product inthecompulsory system ofArticle 58
TheCommission proposes tofollow closely theimplementation ofthis agreement
and,depending onthedevelopment ofthemarket andofprices ,reserves the
possibility ofapproaching theCouncil foranextension oftheapplication of
Article 58tothis product .
Asregards themethod ofcalculating theproduction quotas ,theCommission
intends toextend thequotas effectively accorded during thecourse of
thethree quarters during which Decision 2794 /80/ECSC hasbeen applied .
These -quotas will betransformed into anannual reference .
Itishowever understood that theCommission will take account ,tothe
extent necessary ,ofparticular situations andexceptional difficulties
which could result forcertain undertakings from theapplication ofthe
system ofproduction quotas .
Forthese reasons theCommission consults ,ontheonehand,byvirtieof Art58(1 ),
theConsultative Committee and,ontheother hand ,requests byvirtue of
thesame Article theassent oftheCouncil totheinclusion ofreinforcing
bars andmerchant bars inthenewsystem ofproduction quotas .