South Korea Challenges India's Steel Import Curbs At WTO

by Mary Swire, Tax-News.com, Hong Kong

04 May 2009

South Korea, a major steel exporter, has requested India to explain its imposition of anti-dumping duty on stainless steel imports to the World Trade Organisation and, in addition, it has tabled a question to the WTO Committee on import licensing, requesting assurances that its new licensing scheme does not restrict imports. This follows complaints from the European steel industry that India's anti-dumping investigation on hot rolled steel products is a sign of increasing protectionism despite India's undertakings at G20.

The Indian government announced that its decision to impose anti-dumping duties on stainless steel was based on the findings that they were landing at below the normal value in the country's port. Besides China and Japan, the other countries and territories named in the notification are South Korea, the European Union, South Africa, Taiwan, Thailand and the US. The duty primarily covers cold-rolled flat steel products. The anti-dumping duties vary from USD13 to USD2,011 per tonne depending on the type of steel, the country of manufacture, the origin of import and the producer and are effective up to and inclusive of the 21st day of October, 2009.

Representatives of the Indian components producers are also complaining that any restriction on imports of high grade stainless steel will hit the industry as this has to be imported for making automotive exhaust products. India is a major producer and exporter of automotive exhaust components like resonator, catalytic converter, pipes and ball flanges to all major automobile companies, including General Motors, Nissan, Chrysler, Volvo, Fiat and Honda.

An absence of a satisfactory response from India to the WTO can lead to a challenge at the WTO Dispute Settlement Committee and if a WTO panel is formed on the issue of licensing restrictions, its decision could also affect India’s ability to impose similar restrictions on other products in the future. However, such processes take a long time.

European steelmakers' lobby, Eurofer, cited a newly-expanded anti dumping investigation by India against hot-rolled flat steel imports as a sign that trade protectionism is intensifying, despite commitments made at the last G-20 summit to refrain from such actions. "We are seriously concerned that, by this action targeting a critical, highly traded steel product, India has set the stage for a proliferation of safeguard actions in the global steel market making a destructive wave of steel exports heading to the EU market unavoidable," said Eurofer Director General, Gordon Moffat.

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