Truth be told, nobody likes to have things dumped on him or her. In layman's term, this would mean being cheated or taken for granted.
However, the act of dumping in the international trade sphere means manufacturers exporting a product at a price below the price charged in their home market, or in quantities that cannot be explained through normal market competition.
Broadly speaking, the World Trade Organisation does allow governments to act against dumping if there is genuine material injury especially to the competing domestic industries.
Hence, the massive dumping of steel products into Asia lately, saw many affected governments resorting to anti-dumping duties or safeguard measures on steel, especially Indonesia, Thailand, the Philippines and India.
Indonesia has filed 11 investigations, of which five were related to the steel industry. In particular, it has imposed anti dumping actions on hot rolled coils against Malaysia and six other countries.
Similarly, Thailand has imposed anti dumping on HRC from 16 countries, including Malaysia.
The latest is Australia, which reportedly considered imposing anti-dumping tariffs of up to 15.45% on HRC imported from Japan, South Korea, Malaysia and Taiwan after a complaint from BlueScope Steel Limited, the nation's largest mill.
Ironically, while Malaysia's HRC products are slapped with anti dumping duties and other types of non tariff barriers from these countries, HRC from Thailand and Indonesia can easily be exported into Malaysia while domestic HRC producers are grappling to export their HRC into these countries.
So, in reality is this situation fair to the domestic steel producers, which are facing drastic erosion in competitiveness even in their own home markets?
At the same time, steel products from major steel producing countries especially China are also flooding the ASEAN market including Malaysia.
Regional steel players are facing a common threat of unfair trade practices by major steel producing countries which could have harmful impact on the steel market in the region.
Most steel exports from China are competing with similar products produced in ASEAN countries. On the other hand, there has been very little export of steel products from ASEAN to China.
Last week, Malaysia, as a result from the International Trade and Industry Ministry's preliminary investigation on imported steel wire rods from China, Taiwan, Indonesia, South Korea and Turkey, imposed a temporary anti dumping duty from zero to 33.62% on SWR from the alleged offenders, which took effect since October 23rd 2012 to February 19th 2013.
Many quarters believe that the temporary measure is envisaged to set a precedent for Malaysia to possibly introduce a full pledged anti dumping duty on SWR from those countries, when the final investigation by the International Trade and Industry Ministry is concluded by February 19th 2013.
Therefore, the action by Malaysia to institute protective walls to insulate its domestic industry from external threats which include those from ASEAN, can be considered as timely given such an intense competitive situation amid the current uncertainties in the global economy.
Source - The Star Online
(www.steelguru.com)
