UAE set to challenge US imposition of steel charges

The UAE may appeal to the World Trade Organization to have recently imposed US charges on some grades of its steel exports removed.

Abdulla Al Saleh, the undersecretary for Foreign Trade and Industry at the Ministry of Economy, said there is “a mechanism to deal with these issues” following the US government’s imposition of anti-dumping charges on a number of local steel pipe suppliers last week over unfair competition.

“We, as a government, are trying to solve it through consultation bilaterally with the US administration and we will try to solve it through consultation. If it doesn’t work, we haven’t decided yet, but we have another option to go through the WTO channel. It depends on the case and the evidence we have but we believe that we don’t practice any measures that [are] dumping or harming the US market.”

On Friday, the United States International Trade Commission said that it would impose the charges after a US department of commerce investigation had determined that circular welded carbon-quality steel pipe had been sold below market price.

The pipe is used for fence tubing and in plumbing and heating systems, air-conditioning units and automatic sprinkler systems.

The case was brought after complaints were received from two Missouri-based steel tube manufacturers and two more based in California and Illinois.

Mr Al Saleh said that steel companies in the UAE did not receive any form of government subsidy. “There is no support from the government for the industry for practising any unfair trade in the international market.”

Although keen to make its case against US-imposed duties, Mr Al Saleh said that the UAE Government was still considering increasing tariffs on cheap Chinese steel as part of a coordinated action from GCC governments against alleged dumping of Chinese steel in local markets. Currently, a 5 per cent duty exists on Chinese steel imports into the UAE.

Mr Al Saleh said that the GCC Secretariat was still studying a proposal over whether to increase duties. “Hopefully, we will reach an agreement that is not protecting the market but is to protect fair competition in the market,” he said.

Steel prices had slumped over the past two years, with steel billet prices dropping from just under US$500 per tonne at the beginning of last year to a nadir of $50 per tonne in March this year, with many governments blaming Chinese overcapacity for driving down prices. The European Union and US have imposed tariffs on Chinese steel this year. At the same time, the price slump in the market has reversed and billet prices are now back up to $300 per tonne.

Speaking at The Big 5 conference, Bharat Bhatia, the founder and chief executive of Jebel Ali-based rebar manufacturer Conares Steel, said that Chinese steel imports were “damaging the growth of the steel market across the globe … We are trying to request the Ministry of Economy to support us by protecting local industry. I believe the ministry is taking seriously how to [ensure] the industry survives here.”

Mr Bhatia’s company exports to Australia, Europe and the US. He said the imposition of protectionist measures was “very important for any country to protect domestic producers”, even if this means higher tariffs being imposed on his products in the US.

Mohammed Al Afari, the vice president of marketing at Emirates Steel, said that it has tried to deal with falling steel prices by producing higher-value products such as sheet piles and specialist steel for use in offshore projects.

However, he said that it had also held discussions with the UAE Government about the effect of cheap Chinese steel.

“The government is very well aware about the situation,” he said. “It is their call. I believe they are taking the right measures.”

mfahy@thenational.ae

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