Quotas are applied to finished steel products from South American (MERCOSUR) countries after the two blocs signed a historic free trade agreement on January 17 this year.
The violation of the agreement was committed without prior negotiations with MERCOSUR members Argentina, Brazil, Paraguay and Uruguay or with associated countries Bolivia, Chile, Colombia, Ecuador and Peru.
According to local press reports, the EU has granted Brazil an annual quota of 227,000 metric tons (mt) of finished steel products, while slabs and billets will remain exempt from imports.
Marco Polo Melo Lopez, executive president of the Brazilian Steel Institute, told the Valor Economico newspaper that "negotiations are still ongoing because the EU proposal is unsatisfactory and requires adjustments to product categories."
The trade agreement is important because it creates one of the largest free trade zones in the world, linking the EU with the South American bloc of countries representing more than 700 million people.
The initial preliminary agreement – still subject to legal review by the European Court of Justice – was designed to reduce or eliminate tariffs on 90 percent of bilateral trade in goods, expand EU access to essential minerals such as lithium, and included a protective mechanism for sensitive agricultural sectors, as well as providing a safety net for European farmers.
