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HA NOI (Biz Hub) — The Viet Nam Steel Association is proposing reasonable import tax rates for iron and steel products amid concerns over the effects of a possible mass inflow of imported steel from Russia.

The concern was aired during free trade agreement (FTA) negotiations with the Customs Union of Belarus, Kazakhstan and Russia. It comes amid difficulties in Viet Nam's steel industry in recent years resulting from high inventories and oversupply, which have made competition, even among domestic steel producers, harsh.

The setting up of import rates for Viet Nam's products, including steel, at the negotiations is now underway, said the Hai Quan (Customs) online newspaper.

The newspaper quoted association officials as saying that the competition in the sector would grow harsher since Russia was one of the world's largest steel producers.

It cited figures showing that Russia ranked fifth in the world in steel production last year with 68.7 million tonnes, far beyond Viet Nam's modest 5.6-million-tonne production. Russia's iron and steel exports reached 23.6 million tonnes.

The country's steel industry will be facing possible shutdown if imported steel from Russia is granted a zero tax rate under the proposed FTA, association officials said.

The association proposed that import tax rates for steel under the FTA negotiations adhere to Viet Nam's commitments to the World Trade Organisation even as it helps protect local producers from unequal competition.

The sixth round of FTA negotiations with the Customs Union closed on Wednesday in Russia's Sochi City. The next round will also be held in Russia from September 15 to 19. — VNS