WIREDGOV

The EU yesterday requested the establishment of a panel at the World Trade Organization (WTO) to seek the elimination of unlawful export restrictions imposed by Indonesia on raw materials necessary for the production of stainless steel, notably nickel ore and iron ore.

The measures the EU is challenging concern an export ban on nickel ore and domestic processing requirements on nickel ore and iron ore. These measures illegally restrict access for EU steel producers to raw materials needed for stainless steel production.

Executive Vice-President and Commissioner for Trade Valdis Dombrovskis, yesterday said:

“Following repeated attempts to resolve this issue directly with Indonesia, the EU is now forced to take action and refer this issue to the WTO. We will always act to protect the rights of our economic operators and safeguard the level playing field for EU producers. The fact is that no WTO member is permitted to restrict exports of raw materials in this way, imposing illegal restrictions to favour domestic producers. We will take the necessary measures to restore fair conditions for the EU steel industry, as is our right, and as we have undertaken to do as part of our implementation and enforcement agenda. These are very challenging times for the EU steel sector, which is faced with global overcapacity, illegal subsidisation and other trade-restrictive measures, as well as the COVID-19 economic crisis. We will take every possible action to support our steel operators in this difficult environment.”

While the EU industry has reached its lowest level of stainless steel production in 10 years, Indonesia is set to become the second largest producer in the world after China, fuelled by unfair and illegal advantages like the ones challenged in this dispute.

In its panel request, the EU is challenging Indonesia's long-standing and varying restrictions of nickel ore exports. Since January 2020, Indonesia has introduced a full ban on exports of nickel ore, reserving it for Indonesian stainless steel production.

Indonesia also applies domestic processing requirements on nickel ore and iron ore, which oblige businesses to subject their raw materials to certain processing or purification operations in Indonesia prior to exporting them. This further unduly restricts exports of unprocessed raw materials.

These measures are clearly inconsistent with the prohibition of export restrictions in Article XI:1 of the General Agreement on Tariffs and Trade (GATT) 1994.

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