EU requests WTO panel against Indonesia’s export ban on raw material for stainless steel

EU requests WTO panel against Indonesia’s export ban on raw material for stainless steel

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The European Commission (EC) has announced that the European Union has requested the World Trade Organization (WTO) to establish a panel 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 EC stated that no WTO member is permitted to restrict exports of raw materials, imposing illegal restrictions to favor domestic producers. “These are very challenging times for the EU steel sector, which is faced with global overcapacity, illegal subsidization 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,” Valdis Dombrovskis, executive vice president and commissioner for trade, said.

The EU’s request for the establishment of a WTO panel will be discussed at the meeting of the WTO Dispute Settlement Body (DSB) on January 25,. Following the establishment of the panel, the EU will proceed to request the composition of the panel. Once the panel has been composed, the panel will present a timetable for the case.

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, fuelled by unfair and illegal advantages, according to the EC’s statement. Indonesia has implemented a full ban on exports of nickel ore since January 2020, 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 restricts exports of unprocessed raw materials, as SteelOrbis understands.

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