Korea secures 2.073 million-ton country-specific quota; Korea-EU summit called 'a critical turning point'

Yeo Han-koo, chief trade negotiator at South Korea's Ministry of Trade, Industry and Energy, briefs reporters at the Government Sejong Building on Tuesday on country-specific steel quota allocations under the EU's new steel measure replacing its existing safeguard. [Ministry of Trade, Industry and Energy]
Yeo Han-koo, chief trade negotiator at South Korea's Ministry of Trade, Industry and Energy, briefs reporters at the Government Sejong Building on Tuesday on country-specific steel quota allocations under the EU's new steel measure replacing its existing safeguard. [Ministry of Trade, Industry and Energy]

South Korea managed to limit its steel quota reduction to 19.7 percent despite the European Union slashing its overall duty-free steel import volume by 46 percent to protect the bloc's domestic steel industry, the Ministry of Trade, Industry and Energy said Tuesday.

The ministry said the European Commission announced Tuesday its operational plan for a new steel measure to replace the existing steel safeguard, along with country-specific quota allocations.

The new measure, which takes effect Wednesday, reflects the EU's heightened security concerns stemming from the prolonged war in Ukraine and fears over the collapse of its domestic steel industry.

Under the measure, the EU's annual duty-free import volume will fall from 33.82 million tons to 18.35 million tons — a reduction of roughly 46 percent. Imports exceeding that threshold will face a 50 percent tariff, double the current 25 percent rate.

With more than 20 steel-exporting countries competing fiercely over the sharply reduced duty-free quota, South Korea secured a country-specific allocation of 2.073 million tons reserved exclusively for Korean exporters. That figure represents a roughly 19.7 percent decline from Korea's previous quota of 2.581 million tons, a result widely seen as a successful defense given that the EU's overall duty-free quota was cut nearly in half.

The ministry pursued parallel negotiating tracks — working-level talks in Geneva alongside high-level diplomatic channels in Brussels — to press for favorable treatment of Korean steel.

Korea argued it was the EU's first free trade agreement partner in Asia and a "good player" that had never been subject to anti-dumping duties. It also pressed the EU on the grounds that high-quality Korean steel serves as an essential raw material for Korean-owned automotive and battery factories in the EU, underpinning the bloc's manufacturing supply chains and employment.

Yeo Han-koo, the ministry's chief trade negotiator, said the Korea-EU summit proved to be a decisive turning point in the final stretch of negotiations.

The summit took place as talks were intensifying just weeks before the new EU steel measure was set to take effect, elevating the steel issue to a top economic and trade priority between the two sides.

"The steel issue was in fact discussed as a major agenda item at the summit itself," a ministry official said. "That gave the EU a deeper understanding of Korean steel's contribution to EU industrial supply chains and the need to treat Korea fairly as an FTA partner, leading to substantive progress in the negotiations."

Beyond the 2.073 million-ton country-specific quota, Korea also secured access to an additional 1.475 million tons of shared quota available on a first-come, first-served basis among FTA partner countries. If Korean companies actively claim that shared quota, the total available duty-free export volume could reach as much as 3.548 million tons.

"This trade negotiation was not simply a matter of numbers — it was a process of comprehensively persuading the other side on supply chains, investment, employment, industrial competitiveness and strategic trust," Yeo said. "The momentum from summit diplomacy was the decisive factor that drove real progress."

He added that Korea would continue to take proactive trade measures to secure stable access to overseas markets and protect national interests in the face of tightening import regulations by major economies.


oskymoon@heraldcorp.com