Steel firms steel themselves for challenges

Wednesday, Dec 03, 2014 08:24

A production line at the SMC Tan Tao Company. Domestic steel producers have not paid much attention to trade defence measures in the global integration process. — VNA/VNS Photo Hoang Hai

HA NOI (Biz Hub) — Global integration serves as a good opportunity for domestic steel makers to expand their market.

However, they still face an increasing number of trade defence instruments, such as anti-dumping or anti-subsidy duties from importers.

Viet Nam is negotiating free trade agreements with the European Free Trade Association and the Customs Union of Russia, Belarus and Kazakhstan, as well as the Trans-Pacific Partnership with the Asia-Pacific Economic Co-operation Forum and the ASEAN Economic Community, notes industry insiders.

The Viet Nam Steel Association (VSA) reports that steel consumption this year is expected to grow between 10 to 12 per cent because of the large volume of steel sheet product exports and galvanised steel pipes. In spite of this, cheap steel from China makes up a significant portion of domestic steel consumption.

According to Nguyen Van Sua, VSA vice chairman, anti-dumping and anti-subsidy suits will lead to financial losses for domestic businesses and a decline in export revenues, resulting in the loss of markets for domestic businesses.

From 1994 to 2013, Viet Nam had to face 52 anti-dumping suits from 15 different countries around the world. Vietnamese steel exports accounted for 15 of these suits.

Sua reveals that many businesses had not really paid much attention to trade defence measures and fail to consider them as part of their business strategy.

Pham Chau Giang of the Vietnam Competitive Authority says a lack of skilled employees in the investigating agency, the language barrier and lack of finances have led to poor results in the handling of suits.

Giang also notes that domestic businesses had failed to prepare well for the suits.

Sua observes that domestic businesses are not fully aware of trade defence measures and had failed to work and co-ordinate closely with the investigating agency to provide information that will make the investigation more accurate and favourable.

Sua attributes this to the lack of knowledge on international law. He warns that steel producers must be fully prepared with documents and information and work with the investigating agency to make the ruling favourable to them.

In addition, concerned agencies need to enhance their professional capacity to help businesses deal with commercial litigation.

Nguyen Ngoc Quan, general director of Kansai Steel, reveals that many countries use trade defence measures to effectively counter anti-dumping and anti-subsidy effects, but some countries have yet to fully exploit trade defence measures' advantages.

If the steel industry knows how to use trade defence measures to deal with the mass importation of cheap steel from China, this will create opportunities and markets for domestic steel makers to further develop.

To bring into full play the efficiency of trade defence measures, the role of an ad hoc agency and concerned agencies are crucial. In addition, businesses must also deepen their understanding and strengthen their co-operation with authorities to effectively deal with problems arising from suits. — VNS

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