VietNamNet Bridge – The enterprises which make products from stainless steel, have been put on tenterhooks when hearing about petition for the anti-dumping measures.
The quick fire problems
In late May 2013, the Competition Administration Department (CAD), an arm of the Ministry of Industry and Trade (MOIT), released a notice that it has received the petitions from Posco VST and Inox Hoa Binh Companies, asking for carrying out an anti-dumping investigation against the cold rolled stainless steel imported to Vietnam from four markets, including China, Taiwan, Malaysia and Indonesia.
Under the current regulations, MOIT will make final decision on whether to conduct such an investigation within 60 days since the day it receives petitions.
Though no official decision has been made by MOIT, the information has made the enterprises that use cold rolled stainless steel imports to make finished products have numbed. They said that the anti-dumping measures, if applied, would sink them, who now have to struggle hard to hold out to survive the current difficulties.
Especially, they have warned that the measures would not only put big difficulties for them, but would also bring bad consequences to the socio-economic development.
The production costs would be pushed up unreasonably due to the anti-dumping barriers, which would make it more difficult to access the high quality material sources.
If so, the production costs of finished products would be increasing, which would bring about the difficulties in boosting exports, because the countries which can access low cost stainless steel materials would dominate the world market soon.
Especially, the manufacturing industry and food processing industry would also see the investment rates up because of the same reason.
The policies which kill 100 just to protect 2
If MOIT decides to apply the measures to protect the local production, this would certainly benefit the two stainless steel manufacturers. However, if so, this would raise the worry about the unhealthy competition.
The market then would be dominated by Posco VST and Inox Hoa Binh, which, with 70 percent of the market share, would be able to control the market prices. The monopoly may lead to the fact that the domestic manufacturers join hands to push the prices up, when there is no other rival to ensure a healthy competition.
The noteworthy thing is that before the petitions of Posco VST and Inox Hoa BInh were lodged, the import tariff on cold rolled stainless steel has been increasing continuously from zero percent to five and then to 10 percent, which has been applied since the beginning of the year.
The repeated tariff increases have upset the business plans of the enterprises which need cold rolled stainless steel to run their production.
Nguyen Xuan Phu, President of SunHouse, said the kitchenware manufacturer has shifted to use Posco VST’s products since the beginning of the year because the group cannot bear the overly high import tariffs.
Phu said it’s natural for the government to protect the local production, but it still needs to think about the protection measures to ensure the harmonization in the benefits of relevant enterprises.
“It’s necessary to consider the benefits of the whole national economy instead of just trying to protect the benefits of the minority,” Phu said.
The businessman believes that the import tariff of 2-3 percent would be most reasonable.