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. Last Updated: 07/27/2016

EU to Hike Its Quota on Steel

The European Union plans to expand its quota on steel imports from Russia by 28 percent, reflecting greater EU demand after the entry of Bulgaria and Romania, the European Commission said Thursday.

The EU intends to set a 2007 quota on Russian steel of 2.9 million tons, up from 2.27 million tons last year. The limit applies to flat and long products, which represent about one-third of the country's steel exports to the EU, which expanded to 27 nations when Bulgaria and Romania joined in January.

The higher ceiling will help ensure "the orderly and equitable development of trade in steel," the Commission said in a proposal Thursday in Brussels. The plan, due to be approved by EU governments in the coming weeks, will supplant a decision made in December to fix Russia's 2007 steel quota at last year's level pending a new agreement and will raise the limit to 3.03 million tons in 2008.

The EU quota caps steel shipments for users such as the construction, machinery and shipbuilding industries under the bloc's normal steel tariffs, which are zero for the products covered. The EU would abolish the quota should Russia join the World Trade Organization.

The cap on products including coils, heavy plate, beams and wire rod protects EU manufacturers such as ArcelorMittal, ThyssenKrupp and Celsa Group from the risk of a surge in imports from Russia, which had 70.8 million tons of output last year.

The EU is also adjusting the steel quotas of other countries following its expansion in January. In May, the bloc raised Ukraine's steel quota by 32 percent to 1.32 million tons this year and plans to fix a new steel cap in 2007 for Kazakhstan.