Christopher O'Sullivan (Cork South West, Fianna Fail)
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22. To ask the Minister for Enterprise, Trade and Employment the steps being taken to ensure security of steel supply for Irish companies in view that there is a fear in the sector of a shortage of supply; and if he will make a statement on the matter. [5513/21]

Leo Varadkar (Dublin West, Fine Gael)
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I believe the Deputy's Question may relate to the application and operation of the European Union's Safeguard Measures on steel, which have been in operation since July 2018.

The EU’s Safeguard Measures for steel were initiated in July 2018 in response to the United States applying a 25% tariff on steel imports originating from 3rd countries, including the European Union. This action by the US resulted in steel originally destined for the US market being diverted to the EU with the associated risk of flooding the EU market with steel products to the detriment of Union industry and producers.

In response, in 2018, the European Commission brought forward Safeguard Measures to manage the volume of steel entering the Single Market from 3rd countries. The Measures currently in place allow for the importation of steel from 3rd countries by way of quotas, determined in line with traditional volumes of trade in steel using the 2015-2017 reference period. Steel imports outside of the quota limits are subject to a 25% tariff on landing in the EU. These current Measures are due to expire at the end of June 2021, unless prolonged after further review.

Due to the UK’s withdrawal from the European Union, as of 1st  January 2021, the UK is no longer party to the EU’s Measures and the UK is now a 3rd country in relation to the application of the EU’s Safeguard Measures. Under the EU’s Safeguards, the UK - now operating as a 3rd country - has been allocated its own specific quotas for the majority of the EU’s 26 product categories subject to the Measures.  Furthermore, in anticipation of the UK’s new status as a 3rd country, in September 2020, the UK Government issued a notice stating that it would establish its own set of Safeguard Measures and "transition" 19 of the 26 product categories subject of EU Safeguards from the 1st January 2021. The UK has also calculated its own quota levels for imports of steel products from 3rd countries, including the EU into the UK.

Irish importers can continue to import steel from the UK without the additional "Safeguard" tariff of 25% if the volume of imports remains within the EU's quota allocations for the UK.  Imports from the UK to Ireland, or other EU Member States, in excess of these quotas will attract a 25% tariff. Similarly, imports of steel from other 3rd countries into Ireland would also be subject to a 25% tariff if the exporting country exceeds the available quota. Importantly, however, Irish importers can continue to import steel from the rest of the EU as part of the Single Market where no tariffs or quotas apply.

In applying the Safeguard Measures, the European Commission has undertaken 2 reviews of the Measures, with the most recent review conducted in June 2020. The findings of that review included details on the availability of quotas for each product category. The Commission's review found that in the last quarter of year-2 of the measures (i.e. April - June 2020), a significant level of quotas remained unused, with quotas available in every product category.  Furthermore the review noted that as of 15 May 2020, there were 9 million tonnes, or 29% of the total quotas, available for use in year-2 of the Measures ('year-3' of the Measures began in July 2020). This would indicate that the application of the EU's Safeguard Measures does not affect the availability of supply, as quotas are not exhausted before the end of a given period. 

In addition, the Commission has previously stated that the imposition of Safeguard Measures are not designed to unduly restrict trade flows but are instead designed to allow a level of imports proportionate to the needs of the Union market. This principle remains in place, now that the United Kingdom is a 3rd country in relation to the application of the EU's Safeguard Measures. 

Finally, neither my Department, nor any of our Enterprise Agencies, is aware of any supply concerns by industry regarding imports of steel into Ireland. The quotas available for steel reflect traditional levels of trade in steel and the Commission's evidence suggests that the quotas are not being exhausted. Conversely, demand for steel has declined as a result of COVID-19, with the Commission and industry advising that it could be 2022 before demand returns to pre-COVID-19 levels. This would suggest that the imposition of Safeguard Measures should not result in any supply issues for industry.

Finally, officials in my Department will continue to monitor the situation and they remain actively engaged with the Commission on the matter including the interplay between the Measures and the Northern Ireland Protocol with the view of finalising how Measures should operate and apply in respect of Northern Ireland.