ARCHIVESHISTORIQUES
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DOCUMENTS "COM"
COM(82)231
Vol.1982/0093

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)231 final .
Brussels 29April 1982
INTRODUCTION OFAFURTHER PRODUCTION QUOTA SYSTEM
UNDER ARTICLE 58AFTER 30JUNE 1982
(Communication from theCommission totheCouncil )
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COM (82)231 final .

1.
Introduction ofafurtherproductionquotasystem
underArticle58after30Jung19ft?
Thepresentsystemformonitoringproduction anddeliveriesofanumberof
steelproducts andtheestablishment ofasystemofproductionquotasfor
certainofthese,beganon1July1981andwillendon30June19820.These
measureswereintroducedinthelightofthemanifestcrisisinthesteel
industry,andhaveresultedinagreaterstabilityofthemarketanda
necessaryincreaseinpricelevels.However,thefundamental problemsof
thesteelindustryhavenotchanged:
thereisstillaverylargeover-capacity incomparisontosteel
demand,
demandwithintheCommunityin1982isbelowthatof1981which
wasalreadyatalowlevel,
thedisequilibrium oftheworldsteelmarketcontinuessothatthe
existingover-supply exercises adepressiveeffect,
exportmarketsaredepressed,andtheCommunityexportsin198?
willbesubstantially lowerthanin1981.
Thus,itcanbeseenthatastateofcrisis,forthesteelindustryasawhole,stillexists.
Themarketsituation hasworsenedforwirerod.Thisproductisnotincluded
intheexistingquotasystembecauseconditions inthemarketforwirerod
havebeenrelatively favourable,butadeterioration indemandandpricelevels
inrecentmonthsnowindicatesthatthereisastrongcaseforincludingthis
productinaquotasystem. '
TheCommission doesnotseektointroduceobligatory quotasinrespectof
thoseproductsforwhichproducers haveundertakenindividual andvoluntary
commitments totheCommission,asisthecase,forexample,forreversingmill
platesorheavysections.Itisalreadyapparent,however,thatnosuch
voluntarycommitmentswillexistforthoseproductsnowcoveredbythe
obligatory system,after30June1982.
Irtviewofthecontinuation ofthecrisisinthesteelindustry,andinthe
absenceofvoluntaryagreementsforproductsincludedintheCommission's
presentquotasystem,itisproposedthatanewquotasystemshouldbeintroduced
on1July1982,torunto31December1983,butwiththepossibilityof
terminatingitsapplication,ifchangedcircumstances justifythis.Thequota
systemshouldincludetheproductscoveredbythepresentsystem,asdefined
intherelevantDecisions,withtheadditionofwirerod,forthereasons
givenabove.
Decision No1831/81of24.6.81
DecisionNo1832/81of3.7.81
DecisionNo2804/81of23.9.81

Theooligatory production quotas constitute since
October 1981 oneofthemost important elements ofthe
system ofanti-crisis measures .Theother anti-crisis
measures ofthe present system concern :
-the imposition ofprice rules onsteel stockholders and
steel dealers ;
-theregulation ofthe import ofsteel products from third
countries ;
-theguidelines fortheevolution ofsteel prices ;
-theestablishment ofvoluntary delivery quotas forcertain
products which donotfall under thesystem ofobligatory
quotas .
The Commission undertakes the necessary steps toensure
therealisation ofthese measures byappropriate controls .In
addition towhat hasbeen done ,theCommission ispreparing a
newdecision which will permit abetter control ofsales of
second choice material .This measure isnecessary since sales
ofthese products ,which donotneed toconform totheprices
ofthepublished price lists ,have increased abnormally and
<icreate adanqer for the steel price level .The Commission is
considering thepossibility ofstatistical Monitoring of
the imports ofcertain sensitive products ofthe first transfor­
mation inorder tohave available atanearly stage thenecessary
elements for aneffective commercial policy .
Themain objective oftheanti-crisis measures continues
tobetheestablishment ofconditions which permit the steel
industry toundertake thenecessary restructuring measures under
normal circumstances .Since restructuring necessitates afurther
reduction ofemployment ,ithastobeaccompanied bytheappro­
priate social measures .

ELEMENTS TOBECONSIDERED INCONNECTION WITHTHEPOSSIBLE
INTRODUCTION OFASYSTEMOFCOMPULSORY QUOTASFROMJULY1ST1982
Ifacompulsoryquotasystemisre-introduced aftertheterminationofthe
presentsystematendJune,thenewsystemshouldretaintheessential
featuresofthepresentDecisions1831,1832and2804,butwillneedtobe
modifiedtotakeaccountofchangingcircumstances ,andtheexperience
-gainedduringtheoperationoftheexistingsystem.
1•Merger,Separation,orFormationofanewcompanybyexistingcompanies
Theprincipleadoptedisthatincasesofmerger,separationorformation
ofanewcompany,thereferencesofcompaniesnotconcernedintheorga-
nisationalrestructuring mustnotbemodifiedasaconsequence .This
meansthatthereferencesofnewly-formed companiesmustbedeductedfrom
thereferencesofthosetakingpartintherestructuring .
2.Restructuring ofproduction
ThepresentArticle13(introduction ofnewrollingorprocessinglines)
shouldbereplacedbyageneralprovisionallowingtheCommissionto
adjustthereferencesofacompanywhichchangesthestructureofits
productioncapability,providingthechangesarewithinaprogrammeof
restructuring approvedbytheCommission .
Companies engagedinrestructuring andthusunabletofulfilltheir
quotasinaparticular quarterwillbeallowedtocarryov<?rapartof
theirquotastothetwofollowingquarters.
3.Category1a,deliveriesforthemanufacture ofsmallweldedtubes
Itisproposedthataseparateestimation ofthedevelopment ofthissector
ofthemarketshouldbemadebytheCommission eachquarter,onthebasis
ofananalysismadeinconjunction withsteelproducers andtubemakers .
Whenthemarketisincreasing,theappropriate rateofincreasewillbe
appliedtoeachcompany'sreferencefordeliveriestothissector.The
quotaadaptationswillbecalculated accordingly .
A.CategoryId."OtherCoatedSheet"
Thedemandforthisgroupofproductscontinuestogrowrapidly,butthe
growthdifferswidelyfromcountrytocountry.Thecategoryalsoembraces
anumberofproductsgoingintodifferentmarkets.
Theresultisthatauniformreductionratecreatesdifficulties ,especially
forproducersofonlyoneortwooftheseproducts.Ontheotherhand,itmustberecognizedthatthegrowthindemandforthiscategoryis,
inpart,theresultofsubstitution ofuncoatedbycoatedsheetanditcan
bearguedthatcategoryIdmustbemaintainedtoensuremarketdiscipline
foruncoatedandcoated.
Thehighlypositive"reduction"ratesofQIandQII,andtheartificiality
ofauniformratesuggestthatthisgroupofproductswouldbebest
regulatedbyavoluntaryratherthanacompulsoryquotasystem,solongas
thepresentmarketsituationcontinues.

5.WireRod
Themarketsituationcallsfortheintroduction ofwire-rodintoa
compulsorysystem.Giventhatcategories VandVIalreadyexistas
separatequotasongroundsofeffectivemarketregulation,wirerod
shouldbeaseparateCategoryIV.Thereferenceproductionswill
includethemostrecentperiods.
6.Reinforcing BarandMerchantBar
Thereferenceproductions usedtocalculatethequotaswillbebrought
uptodate.
7.Exceptionaldifficulties
Followingtheintroduction ofwire-rod,thethresholdfiguresgiven
inthepresentArticle14willbeincreasedaccordingly .
Otherprovisionsrelatingtothedetailedoperationofthesystem,
suchastolerances onquotas,exchangesofquotas,theadventofnew
companies,orthecessationofproduction,willbemodified,ornew
clausesintroduced,inthelightoftheexperiencegainedinadminis­
teringthepresentsystem.