The recent economic forecasts by The Economist have made a downward revision to global GDP to 2.2% in 2013, but raised India?s growth projection to 6.4%. Since the euro zone has been predicted to experience a contraction of 0.4% in 2013, with the bailout of Cyprus remaining a contentious issue, steel producers in both advanced and emerging markets of the world are increasingly resorting to protective mechanisms. The US has declared the continuation of countervailing duties (to cope with subsidies on trading) on Hot Rolled Coils imported from India, Thailand and Indonesia under Sunset Reviews. This is in addition to antidumping orders on HRC imported from China, India, Indonesia, Taiwan, Thailand and the Ukraine. The US International Trade Commission would further review these two orders issued by the US Department of Commerce. But considering the current political and economic scenario in the US and the deep involvement of US senators in the well-being of the US steel industry, it is likely that both the orders will turn affirmative to stop the import flow of HR from a host of other countries. However, it may be mentioned that by the end of last year, US ITC had terminated the petition against South Korea and Germany on corrosion resistant steel and welded circular pipe case against India, Vietnam and the UAE.
Very recently, Indonesia imposed a stiff antidumping duty of 5.9-55.6% on import of CR Coils/ sheets from Japan, China, South Korea, Taiwan and Vietnam. This is in addition to antidumping duties on import of HR plates from China, Singapore and the Ukraine imposed last year. One may recall that high volume of imports of CR from South Korea and Japan, comprising around 40% and 21%, respectively, of the total imports of CR during the first 11 months of the current fiscal have impacted Indian steel producers adversely, many of whom have already set up capacities and invested heavily to create fresh capacities of auto grade CR. As the increased imports were facilitated under a lower duty regime (3% against 7.5% with progressive decline) under CEPA and the injury is more on the volume factor than on the price factor, it could have been a case for safeguarding the duty imposition. This, however, brings up an interesting issue of FTAs and CEPAs, the bilateral trade agreement formats signed between countries, the applicability of WTO-prescribed measures against unfair trade practices on products covered under these agreements and resolving trade-related matters via review of the agreements. There is a general feeling that bilateral trade has taken the meat out of multi-lateral trade, thereby reducing the effectiveness of WTO mechanisms to settle trade disputes. The Doha round of negotiations on both tariff and non-tariff barriers of trade has hardly made any progress. Although world trade volume has been projected to increase from 2.7% in 2012 to 4% in 2013, the shrinking of the total market size is going to fan up protective tendencies all around the globe in the coming years.
The author is DG, Institute of Steel Growth and Development. The views expressed are personal