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EU, Russia Sign Steel Products Trade Agreement


European Union and Russia sign trade agreement on steel products

The European Union and Russia today reached an agreement on trade in certain steel products at the EU-Russia Summit in Mafra, Portugal.

The deal was signed for the European Union by Trade Commissioner Peter Mandelson and Portuguese Foreign Minister Luis Amado on behalf of the EU Presidency, and on the Russian side by the Minister of Trade and Economy, Elvira Nabiullina.

The two sides agreed on quota levels for 2007 and 2008 on certain flat steel and long steel products, in order to replace autonomous EU measures that had been in place since January of 2007.

Quota levels were raised to take into account the enlargement of the European Union with Bulgaria and Romania, as well as to cover deliveries to steel service centres in EU member states.

Trade Commissioner Peter Mandelson said: "This agreement shows that the European Union and Russia are able to do business in a constructive manner, despite public perception that this is not the case. When our two sides are pragmatic, we make good progress."

The agreement was signed in the presence of European Commission President José Manuel Barroso, Portuguese Prime Minister and head of the Portuguese EU-Presidency José Socrates and Russian President Vladimir Putin.

The agreement increases the quota on flat steel and long steel products to 2.904 million tonnes in 2007 and 3.031 million tonnes in 2008, versus a level of 2.4 million tonnes which was in effect in 2006 under the previous agreement, and in 2007 under the autonomous quota.

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It also takes into account the volume of Russian exports of steel products to Bulgaria and Romania before they joined the European Union in January 2007.

The agreement has been concluded for the period 2007 and 2008, with an automatic renewal after that period. The agreement will be repealed as soon as Russia joins the World Trade Organisation.

Background

Russia has long been the most important source of imported steel products for Europe, and is now second only to China. In the first six months of 2007, the EU imported 4.5 million tonnes of steel products from Russia, 17.5% of total imports of 25.7 million tonnes.

These figures also cover other steel products such as semi-finished steel products and pipes and tubes. In value terms, 2006 imports of steel from Russia (7.5 million tonnes) represented 3.366 billion euros of trade. For the first 7 months of this year 4.75 million tonnes of Russian steel imported had a value of 2 billion euros.

ENDS

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