If we need any reminder that the Brexit transition period is drawing to a close, and of the implications for UK/EU trade, then two public notices issued over the past few months should do the trick. These notices, one by the UK and the other by the EU Commission, relate to safeguard measures on steel products.
It has been clear for some time that trade remedies (anti-dumping, anti-subsidy, safeguards) would exist in UK/EU trade. Attention has tended to focus on the numerous existing EU AD and anti-subsidy measures, and the extent to which the UK will continue to apply measures originally imposed by the EU after the end of the transition period. The UK has developed a methodology to decide which measures to transition, and how to review the continuing need for such measures. But since there are of course no existing AD or anti-subsidy measures between the UK and EU, these measures relate to third countries. Any UK AD and anti-subsidy measures against EU exports (and vice-versa) will perforce be new measures, pursuant to investigations initiated after the end of the transition period.
Safeguards however are different. Since safeguards measures are applied on an MFN basis, the transition of existing EU safeguards implies their extension by the UK to imports from the EU, and vice versa. And this is precisely what is happening. At the end of September, the UK published a notice initiating a transition review of the only existing EU safeguard, which applies to a wide range of steel products. Pending completion of that review, and beginning 1 January 2021, EU steel products will be subject to tariff quotas, with out-of-quota imports subject to a 25% duty. On 30 October, the EU published its own notice "adapting" its safeguard measure, including through the application of a new, expanded tariff quota that includes imports from the UK. Hence, as of 1 January 2020, the free movement of steel products between the UK and EU is a thing of the past.
These measures will, like the transition of AD and anti-subsidy measures, present many interesting legal issues for the UK and the EU. Some Members will likely argue that no transition of these measures is possible, and that the UK (and possibly also the EU), must start from scratch with new investigations. More narrowly, issues will be raised (in fact, have already been raised in the Committee on Safeguards) about how the new TRQs were calculated. Doubtless, questions will also be raised about the UK's methodology for deciding whether to continue the measures. As with subset/expiry reviews, the UK will be posing a counterfactual regarding what would happen if the measures expired (It cannot of course logically ask about whether its industry is currently suffering serious injury caused by increased imports, as the presence of the existing measures should, in principle, have eliminated any such injury).
I do not know how hard these tariff quotas bite for UK steel producers. Perhaps, given the effects of the pandemic, their impact is limited. But this will depend upon how the EU has allocated the TRQs. One thing however is clear -- EU/UK steel trade will be facing new challenges, and soon.
