SA to WTO – Considering emergency steel tariffs to protect against China

By Tom Miles and TJ Strydom

GENEVA/JOHANNESBURG, April 4 (Reuters) – South Africa is considering imposing emergency tariffs on some iron and steel imports, it said in a filing to the World Trade Organization published on Monday.

South Africa’s steel industry body requested the temporary trade barrier because a surge in import volumes had caused the industry “serious injury” in the form of lower sales, output, market share and capacity utilisation, the filing said.

A worker stacks steel pipes in the western Indian city of Ahmedabad in this November 4, 2014 file photo. Any nuclear deal between Iran and six world powers loosening sanctions against Tehran could flood an oversupplied oil market with more fuel, yet sectors like cement and steel would see a rise in demand as the country works to revitalise its economy. Officials involved in ongoing negotiations said on Sunday they were close to a deal that would bring sanctions relief in exchange for curbs to Tehran's atomic programme, although no agreement was expected before July 13, 2015. REUTERS/Amit Dave/Files

It blamed a global steel glut and measures by other countries to protect their steelmakers, as well as new investments by current steel importers, which meant South Africa could expect further increases of imports, the filing said.

The analysis was based on data from ArcelorMittal South Africa, which accounts for 70 percent of local production of the affected goods.

South Africa’s steel sector is facing catastrophe and ArcelorMittal may have to close down if the government does not act soon, labour union Solidarity said.

“If there are no concrete plans on the table to assist the struggling steel industry by the end of April, the primary steel industry in South Africa will perish,” said Solidarity’s steel spokesman Marius Croucamp.

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Another steelmaker, Evraz Highveld Steel and Vanadium, shut its doors in February, shedding around 2,200 jobs in the process.

South African trade authorities indicated earlier that they would decide in June whether to aggressively protect steel manufacturers, Solidarity said, but this would be much too late according to the union.

ArcelorMittal last month said it would raise steel prices from April as it tries to stabilise its business after heavy losses due to competition from cheap imports.

South Africa last year slapped a 10 percent tariff on imported steel, but the emergency tariff, which would not apply to imports of stainless steel or silicon electrical steel, would provide much greater protection.

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