Between hope and failure: What influenced the United States‒EU agreement on clean steel?

In the 2020s, multilateral cooperation in both the climate and the trade regimes is increasingly contested. Countries are often turning to industrial policy instruments with a unilateral and protectionist focus. Against this background, we examine the Global Arrangement on Sustainable Steel and Aluminum (GASSA), which was proposed by the United States and the EU in 2021 to strengthen the decarbonization of the emissions-intensive steel sector as well as harmonize international trade. This study provides a systematic qualitative analysis of the factors that have influenced this initiative and made it ultimately fail. We show that GASSA had strong economic and trade-related incentives, such as the privileged access to steel markets of the EU and United States. Yet, we also demonstrate that in this case, political obstacles as well as structural differences in the steel sector have been more important, creating a gridlock for the negotiations. This study examines a practical case of (failed) decarbonization cooperation and provide empirical evidence for political factors that have an impact on whether a cooperation is launched or not. This analysis can also help in the assessment of other cases, as the study lays the conceptual groundwork for further systematic comparisons. Lessons learned here could be the basis for policy recommendations to make minilateral cooperation more successful.