GCC set to impose definitive safeguard duties

The Gulf Cooperation Council’s permanent committee has recommended the imposition of definitive safeguard duties for three years on various steel products, following the trade defence authority’s probe concluded in February. The first year would see a duty of 16% imposed on the cif value of imports, followed by 15.2% in the second year and 14.44% in the third year.

The GCC’s ministerial committee must now decide whether the duties will come into force. They would not apply to certain countries designated as developing, including Hungary, Egypt and Pakistan. They also do not apply to EFTA countries that have bilateral agreements with the GCC, although supply from these countries represents less than 1% of overall imports.

In July 2020 the GCC-Bureau of Technical Secretariat for Anti Injurious Practices in International Trade (GCC-TSAIP) made a preliminary determination that an increase in imports has caused serious injury to the bloc’s steel industry. No preliminary duties were imposed. In February 2021 it recommended definitive steel safeguard measures are imposed and excluded a number of products from the probe, including hot and cold rolled coil, as well as plate (see Kallanish passim).

“There are currently sufficient production capacities in the GCC countries to meet Gulf demand, and thus users or customers will not be affected by imposing preventive measures,” the GCC Secretariat General says in a report. “If the final measures are not imposed, the prices and market share of the Gulf industry will decline further in favour of increasing imports at low prices … The aim of imposing these measures is not to prevent imports at all, but rather to correct the situation of the Gulf market, and create fair competitive conditions.”

Local production can currently cover 108% of the local market’s requirement for these products, and the industry would be able to meet 189% if it fully utilised its capacity, the report states.

Imports of the subject products into the GCC reached 2.06 million tonnes in July 2018-June 2019 versus 2.17mt in full-year 2018, 2.23mt in 2017, 2.29mt in 2016, 2.52mt in 2015 and 1.97mt in 2014.

Imports of flat products under investigation reached 595,340t in July 2018-June 2019 versus 618,600t in 2014, but increased by 61% in relation to local production. Longs imports were 696,530t in July 2018-June 2019 versus 665,600t in 2014 but increased 25% in relation to production. Tube imports were 770,970t in July 2018-June 2019 versus 689,570t in 2014 and increased 9% in relation to domestic output.

Domestic production of all products under investigation fell in July 2018-June 2019 to 79.8% of the 2014 level, with capacity utilisation down to 74.6%. Flats were most affected, seeing output and utilisation down to 59.7% and 54.9% respectively of 2014 levels.

GCC industry share in local market sales fell to 94% of 2014 levels in July 2018-June 2019, while imports’ share rose to 128.8%. Based on this criteria, local tube mills were most affected, with GCC industry share in sales falling to 87%, while imports’ share rose to 111%.

Adam Smith Germany