The World Trade Organization (WTO) has agreed to set up a formal dispute panel amid a complaint filed by Turkey in an ongoing row with the European Union over steel tariffs.

So-called safeguard measures were first applied by the EU on steel in late 2018, with the bloc concerned that a decision by US president Donald Trump to impose America's own levies on the metal would lead to the EU market being flooded with the product.

Turkey complained in January 2019 that this violated international trade rules, but the EU applied definitive safeguards on 26 categories of steel products the following month that will last until June 2021.

It means import quotas will be in place and that tariffs of 25 per cent apply once those quotas have been filled. Furthermore, the measures were revised again in September 2019 in a way that Turkey claimed further hit its steel exports.

Turkey says the safeguard measures and additional duties are inconsistent with the Agreement on Safeguards and the General Agreement on Tariffs and Trade 1994.

Its Turkish Steel Producers' Association also claims that the EU is ignoring Free Trade and Customs Union agreements between the two parties and is unfairly singling Turkey out for poor treatment.

In August 2020, Ankara made an initial request to the WTO's Dispute Settlement Body to create a panel on the matter, but this was blocked by the EU.

However, Turkey has now made a second formal request and, under WTO regulations, this must be honored with an investigation.

Should the WTO rule in Turkey's favor, it could authorize retaliatory trade measures.

Turkish trade minister Ruhsar Pekcan recently pointed out that steel exporters in his country have been worst affected by the EU tariffs because steel exports to Europe have tripled in the past three years.

Indeed, according to European Steel Association Eurofer, Turkey is the top supplier of origin for European steel imports.

Turkish Steel Exporters' Association figures show steel is the fourth largest contributor to the Turkish economy, with output measured at 33.7 million tons in 2019.