It’s a tale of two nations trying to protect their domestic steel industries.
Recently, Thailand decided to continue with the imposition of a “provisional safeguard” duty on the import of rolled flat steel products of a certain specification, which could directly impact India’s steel exports.
Even as Indian steel manufacturers were digesting this development, a Reuters report stated India was considering imposing emergency tariffs on some iron and steel pipes, tubes and profiles to protect its domestic industry from imports, primarily from China and Italy.
A report in The Indian Express said Thailand’s decision to impose the anti-import duty (first brought in this February) could be “a blow to Indian steelmakers,” which export about 150,000 tons of hot rolled flat steel products every year. The 33.11 percent duty imposed by Thailand’s Department of Foreign Trade (DFT) will continue to be in effect until August.
Thailand’s decision to continue with the temporary tax for another three months has the Indian steel industry jittery.
MetalMiner reported in 2012 how India’s steelmakers were battling the expected fallout from the Comprehensive Economic Partnership Agreement (CEPA), a free trade agreement between India, Japan and South Korea, that had steel on the list of duty-free imports into India.
The industry has been demanding that steel be put on the negative list of CEPA deals with these two nations, keeping in mind the high input costs, dipping domestic demand and rising interest costs. Under the CEPA, trade barriers with Japan and South Korea would progressively come down over the next few years and the steel produced from these nations would flow freely into Indian markets.
Reports suggest that Thailand’s government was trying to allay the fears of Indian steel producers. The country’s DFT apparently had notified the Indian embassy in Bangkok that the Government of Thailand was willing to talk to the Indian steel mills to allay their apprehensions on its action.
Incidentally, Thailand’s decision on the safeguard duty came after neighboring Indonesia had decided to continue to impose anti-dumping duty on two of India’s largest steel producers – JSW Steel and Essar Steel.
Reuters reported the other development at the WTO. According to a “filing” by India, the report stated India was seriously considering imposing “emergency tariffs” on iron and steel pipes, tubes and profiles to protect its domestic industry from imports.
The report claimed Jindal Saw Ltd and Indian Seamless Metal Tubes Ltd (which account for more than half of India’s production of seamless pipes and tubes) asked the government to impose tariffs after their profits fell by more than 75% from 2011-2012. WTO-member countries impose temporary tariffs if they can prove a “threat” to any of their domestic industry from imports, but countries that are affected can challenge the imposition of such taxes.
According to the filing, Indian imports have arrived in India at an annualized rate of 373,777 tons in 2012-2013. Even though that was 12 percent less than in 2011-2012, domestic production had still suffered a decline of 18 percent to an annualized rate of 261,003 tons in 2012-2013.
Sohrab Darabshaw contributes an Indian perspective to MetalMiner.