US, EU Talk Steel Arrangement

The top US and European Union trade officials had a “direct and candid” discussion yesterday on negotiations to create an agreement governing steel and aluminum trade.

US Trade Representative Katherine Tai and European Commission Executive Vice President Valdis Dombrovskis met in Brussels as the two sides seek to reach agreement on the proposed Global Arrangement on Sustainable Steel and Aluminum by October.

At the meeting, Ms. Tai “stressed the importance of both sides generating ambitious proposals in order to address shared concerns on carbon intensity and non-market excess capacity in the steel and aluminum industries,” according to the readout from her office.

“Recognizing the challenge this initiative poses to both sides, she noted the need to work at the deep level of trust, commitment and confidence that characterizes the best of the partnership between the United States and European Union.”

Ms. Tai emphasized that given the October deadline, the United States and European Union need to deliver a high-standard agreement worthy of the two years that both sides will have spent in negotiations, according to the readout.

The Financial Times quoted Mr. Dombrovskis as saying he is hopeful of reaching a deal, given that failure to reach an agreement would mean the return of tariffs on both sides.

The Aluminum Association and European Aluminum sent a joint letter to Ms. Tai and Commissioner Dombrovskis ahead of their meeting urging the two sides to reach an agreement that address both decarbonization and market behavior to best support the aluminum industry on both sides of the Atlantic.

“A well-designed agreement should recognize and incentivize the low carbon, market-driven aluminum industries in Global Arrangement party countries ensuring a level-playing field within the Global Arrangement as regards climate-related costs,” the groups wrote.

“Further, the agreement should set reasonable targets and benchmarks for non-party countries so that they can join the agreement, or face measures for high carbon, non-competitive imports. This will ensure that non-party countries do not jeopardize aluminum production in Global Arrangement member countries.”