The Ministry of Industry and Trade of Vietnam is investigating a case of dumping Chinese steel billet in the domestic market. This issue has been creating disagreements among steel enterprises. One side is in favour of opening up the domestic market for foreign steel billet and opposes trade barriers, while the other campaigns against foreign steel billet and supports safeguard measures.
Lawsuits within the family
The Ministry of Industry and Trade (MOIT) is investigating and applying a series of safeguard measures on steel billet and long steel products imported into Vietnam. However, this action faces opposition from a wide range of steel companies such as Pomina JSC, Natsteelvina Co. Ltd, Vinausteel Joint Venture, B.C.H JSC, Vietnam - Germany Steel JSC, and others. These businesses have filed a request urging for the investigation to be reconsidered. According to these firms, the investigation and application of safeguard measures were likely to negatively impact the development of the steel industry. They argued against the application of provisional safeguard duties of 45 percent on imported steel billet and 33 percent on long steel billet within 200 days, as proposed by the other party.
Meanwhile, after the Ministry of Industry and Trade accepted the safeguard investigation on steel billet and long steel, four companies behind the filing, including Thai Nguyen Iron and Steel JSC, the Southern MYV Steel Co., Ltd., the Vietnam-Italy Steel JSC and Hoa Phat Steel JSC, continued making arguments about the necessity of applying safeguard measures for this commodity group and urged implementation as soon as possible.
Accordingly to the plaintiff, the massive importation of foreign steel turned the steel industry of Vietnam into a place for late-stage processing and a consumer market for foreign steel. Using safeguard measures, therefore, would not only help prevent trade fraud or reduce significant losses from import tax, but also serve as an important tool to protect Vietnam's metallurgical industry from the risk of being wiped out and the consequence of years of recovery.
Not only would it protect production enterprises upstream, but also the domestic steel industry. Besides, seeing that the amount of steel billet imported into Vietnam increased three folds compared to 2014 (1.9 million tonnes, approximately), of which imports from China accounted for more than two thirds with prices continuously dropping, now much lower than cost of domestic production, the application of safeguard measures would help tone down this import fever.
Paying attention to domestic manufacturers
The Vietnam Steel Association is facing a dilemma when the number of objectors is equal to the supporters and all are members of the association. The association is forced to make a decision and pick a side, while making the other understand. As of now, Mr Ho Nghia Dung, Chairman of the Association, has sent written documents to Pomina JSC, Natsteelvina Co. Ltd, Vinausteel Joint Venture, B.C.H JSC, and Vietnam - Germany Steel JSC.
The association said: The capacity of domestic steel mills was approximately 12 million tonnes of steel/year. However, in 2015, due to competition from 1.7 million tonnes of low-price imported steel billet (a 200 percent increase compared to 2014), domestic production reached only 5.9 million tonnes and firms were operating at just half their capacity. Long steel production also faced a similar situation.
Thus, the association believed that the importation of large quantities of foreign steel billets and long steel into Vietnam, if not considered in time, could seriously affect the existence of steel manufacturers in the country, as well as construction steel and the whole industry in general.
The final decision of the Vietnam Steel Association was supporting the protection of domestic steel production using safeguard measures consistent with international commitments. The Vietnam Steel Association urged domestic steel enterprises to cooperate and work together to build an industry of sustainable development, efficiency and fair competition.
Ms Pham Chau Giang, Head of Trade Remedies Investigation at the Vietnam Competition Authority (MOIT), said: The fact that domestic manufacturers proactively proposed investigation into the application of safeguard measures is an encouraging move in the context that these measures are already being widely used in the world. We encourage businesses to use their legitimate rights to self-protect against unfair competition or massive importation of foreign goods.
Luong Tuan
Vietnamese
