Is the US-EU Agreement an Opportunity or a Threat?

In 2020, Turkey's steel production increased by 6 percentage points more than the world production, reaching 6.1%. Despite the 10.6 decline in October due to the 23.3% decrease in China, in the first 10 months of 2021, while global crude steel production recorded a 5.9% increase, Turkey's production increase was 14.2%. Considering that this trend may continue in the next 2 months, in addition to the positive situation in 2020, it is estimated that the increase in production in Turkey will be at least twice the increase in world steel production by the end of the year. This increase in production has been significantly driven by foreign demand rather than domestic demand. Despite all protection measures, our steel sector continues its success in the international market in 2021. During a period when protection policies continue to be heavily implemented, it is noteworthy that despite the large increase in imports, the export-to-import ratio of steel products increased from 109% to 115%. On the other hand, despite the rapidly declining domestic consumption in recent months, the continued increase in imports is causing our steel sector's share in the domestic market to decline. Meanwhile, following the customs tariffs agreement on steel imports between the US and the EU, it is observed that a new era is beginning in reducing the high level of protection barriers in world steel trade. Countries like Japan and the UK continue their initiatives to be exempted from the tariffs imposed by the US on steel imports, while South Korea is working to improve the current quota level. Within the framework of existing protection measures, there is concern that this agreement will create a 'closed-loop steel trade' system between the US and the EU. Such a system is considered to contradict the frequently mentioned discourse of 'free and fair trade' and is seen as leading to unfair competition against third countries, including Turkey. On the other hand, within the scope of the said agreement, it is foreseen that exports from the EU to the US will cause a deficit in Europe's already balanced production-consumption balance and that this deficit will be compensated by imports, which could create a new opportunity for the Turkish steel sector. In this context, considering that our foreign trade with the US and EU countries has a balanced structure and that there is an agreement between the Presidents of both sides to increase the bilateral trade volume with the US to 100 billion dollars, it is of vital importance for our steel sector to undertake multi-faceted initiatives to ensure that the quota application between the US and the EU is also implemented with our country, and similarly, to relax the quotas that the EU applies to Turkish steel products, thus turning the agreement between the US and the EU, which leads to unfair competition, into an opportunity.