Steel tensions: US warns EU against reviving WTO complaints
Steel tensions: US warns EU against reviving WTO complaints

March 19, 2024 – The US government has warned the European Commission against reviving WTO disputes over steel. Is the EC deliberately provoking the United States? Growing shortage: Copper prices have risen by almost 15% since fall 2023.

Steel tensions: US warns EU not to revive WTO case

The US has told the European Union that if it reopens a case against Washington at the World Trade Organization (WTO) over a Trump-era steel and aluminium dispute, it would risk reforming the WTO.

The warning from Washington, which according to media reports is likely to be very clear, that efforts to reform the WTO will be scuppered shows the deep rift the European Commission has left in the transatlantic trade partnership.

GASSA failed, EU threatens WTO complaints

At the end of 2023, the EU was already thinking aloud about reviving the WTO dispute with the United States, which had been put on ice. Statements on this also emerged in the context of the US-EU negotiations on a Global Arrangement for Sustainable Steel and Aluminum (GASSA). GASSA was supposed to be finalized at the end of 2023, but failed due to differing positions on both sides.

The attitude of the European Union, which is represented by the European Commission in such cases, seems to be following its repeatedly demonstrated high-handedness in international trade issues. In the current global political situation, it is bordering on sheer stupidity to force divisions with important NATO partners. And that such behavior leaves the United States with no choice but to give Europe a free shot.

Thorsten Gerber, CEO of the Gerber Group, said today: “The EC has been showing for quite a while that they are no longer the sharpest tool in the shed.” (Or as a fitting German saying: “Die EC hat doch den Schuss nicht gehört!”)

Is the EC deliberately forcing a dispute with the US government?

Whether the EC even has a mandate for such an initiative from the EU Parliament or the member states seems rather questionable. It is more likely that the EC is much less interested in WTO reform and functioning WTO courts than it would like to admit to the outside world. And is using the failed negotiations to prevent complaints against market protection measures that violate WTO law, such as the Carbon Border Tax CBAM or the EU Safeguard Measure against steel. And then to shift the blame to the United States.

Copper price jumps again

The copper price has staged a huge rally of almost 15% since its low in early October 2023. The important economic indicator was also unstoppable in February and March 2024 and currently stands at over USD 9,000/MT.

Causes: Copper in short supply, global economy picking up

In addition to the recovering global economy, the copper rally is also being driven upwards by current shortage problems. At the end of 2023, one of the world’s largest copper mines in Panama had to close. Due to an energy crisis in the African country and important copper supplier Zambia, production is also falling there. In addition, Chinese copper mine operators had also raised the possibility of production cuts.

Falling copper stocks on the LME indicate that the availability of copper on the global markets is already declining rapidly.

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