EU, United States agree steps to decarbonise steel
Biden - von der Leyen - Photo © European Union 2021
(BRUSSELS) - The European Union and the United States agreed Sunday to suspend bilateral WTO disputes on steel and aluminium, and start discussions on a Global Arrangement on Sustainable Steel and Aluminium.
The deal, agreed by European Commission chief Ursula von der Leyen and United States president Joe Biden, marks a new milestone in EU-US efforts to achieve the decarbonisation of the global steel and aluminium industries in the fight against climate change.
Steel and aluminium manufacturing is one of the highest carbon emission sources globally. For steel and aluminium production and trade to be sustainable, the carbon intensity of the industry, together with problems related to overcapacity, need to be addressed.
The Global Arrangement will seek to ensure the long-term viability of both sides' industries, encourage low-carbon intensity steel and aluminium production and trade, and restore market-oriented conditions. The arrangement is expected to be open to all like-minded partners to join.
In addition, following the United States' announcement that it will remove Section 232 tariffs on EU steel and aluminium exports up to past trade volumes, the European Union has decided to take steps to suspend its 'rebalancing' measures against the United States. The two sides have also agreed to pause their respective WTO disputes on this issue.
Commission president von der Leyen hailed the deal as an important milestone for a 'our renewed, forward-looking agenda with the US'.
"The global arrangement will add a powerful new tool in our quest for sustainability, achieving climate neutrality, and ensuring a level playing field for our steel and aluminium industries," she said: "Defusing yet another source of tension in the transatlantic trade partnership will help industries on both sides."
In June 2018, the US Trump administration introduced tariffs on €6.4 billion of European steel and aluminium exports, and further tariffs in January 2020 that affected around €40 million of EU exports of certain derivative steel and aluminium products. The EU introduced rebalancing measures in June 2018 on US exports to the EU in a value of €2.8 billion (a similar EU response followed the second set of US tariffs in 2020).
EU-US negotiations on trade on steel and aluminium - background guide
EU unilateral statement on the suspension of countermeasures