Russian Metallurgists Allowed into the EU
// Steel Import Quota to Europe Approved
International Cooperation
Yesterday, director of the Economic Development and Trade Ministry’s department on trade negotiations Maksim Medvedkov and the European Commission’s charge d’affaires in Russia, Silvia Kofler, signed an agreement defining the steel export quota to EU countries for this year. Due to the expansion of the EU, the limit has been increased by a third. Russian metallurgists waited for this agreement for half a year. If negotiations had been prolonged further, the fall supply of metal products to Europe would have been off: last year’s steel quota for Europe had been already set.
The document signed yesterday makes in some corrections in the Russia-EU agreement of 2002, regulating the supply of metal-roll to the European market in 2002-2005. In connection with the May expansion of the EU, the limit on the export of Russian steel to Europe increased by 438,216 tons and became 1.822 million tons. The rise touched the following nomenclature: roll (by 76,200 tons), heavy plate (by 80,610 tons), other sheet products (by 163,996 tons), alloyed steel (by 596 tons), beams (by 14,603 tons), rods (54,440 tons), and other profiled steel (by 47,768 tons).
After introducing restrictions to steel export to EU countries in 2002, the European market ceased to be the key market for Russian metallurgists. Last year, they sold 1.384 million tons of steel to the EU. For comparison: total exports of Russian metal in the first quarter came to 7 million tons. Maksim Medvedkov told Kommersant the set quota is “maximum of what can be got in the circumstances, considering the fact that Russia is not a member of WTO. In the Russian Economic Development and Trade Ministry (MERT) it is considered that the 2005 quota will be even higher. It is possible that Russia will insist on changing the relation of the kinds of products within the restrictions of EU agreement. In order for that to happen, MERT will define its negotiating position in light of metallurgists’ suggestions,” says Medvedkov.
Metallurgists, in turn, hope that the quota for next year will be set beforehand. This year, after new countries joined the EU, Russian companies continued to export metal to them, but EU restrictions had already gone into effect. As result, last year’s quota had already been chosen for most positions. “This all happened just before fall,” OAO Severstal manager of crelations with investors Olga Ezhova says, “If the quotas had been set after September 15, most Russian companies would have failed the September and October jobs.” She also said that Severstal was not forced to stop trade with the EU -- thanks to the representative in Latvia, which entered the EU, part of the delivery was reoriented to Severstallat. But in 2005 we would like to have a ready agreement on flat section and profiled steel, Ezhova emphasized.
Russia’s position on complementary issues, for instance, our metallurgists have been insisting on increasing customs duties for export of ferrous scrap, can also influence the outcome of the negotiations. Up to now, the MERT position was well-defined. “If metallurgists want to receive benefits from the world steel market, they must play according to the rules already set there,” Medvedkov said, “No country in the world charges taxes for export of scrap, although they all experience a lack of these materials. Customs is subsidy to national companies, so nobody will take us seriously on the world market with these subsidies.”
Ekaterina Safarova
All the Article in Russian as of July 28, 2004
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Photo: Oleg Lazarev
