Anti Dumping Cases Increase as the Technique Becomes More Widely Adopted

(Metal Miner)

Fine words were espoused from all quarters during the economic crisis that countries would not adopt protectionist measures, but one year on and we can see that few have held to that line. The U.S. and Canadian authorities’ action over steel tubes and fasteners from China is one that naturally hit the headlines but to be fair the North Americans are far from alone.

Of course countries do not even have to apply a duty, just the threat of a case being under investigation is enough to choke off imports as the supply chain does not want to be caught holding material if a levy is applied. So when the

Russian government extended its year-long anti-dumping investigation into imports of nickel-bearing flat stainless steel products from China, Korea, Brazil and South Africa they were in effect extending a protectionist move without needing to actually apply a rate. The investigation, which commenced on 27 March 2009, will go on for another three months, the Russian ministry of industry and trade said. Meanwhile the €840/metric ton (US$1180/metric ton) import duty on stainless with nickel content of 2.5% or higher from the European Union expired on 20 March and although there is currently no sign of a new investigation into European stainless, “… producers will have to make some effort in order to reinstate their presence on Russian market,” Steel Business Briefing reported a Russian special steel association spokesman as ominously saying. […]

China was targeted in 116 anti-dumping and anti-subsidy cases last year, with more than US$12 billion involved…

Good work for the lawyers. Will all this legal wrangling ease as markets come out of recession and gradually return to strong growth, probably not. Whatever lawmakers say, anti-dumping and similar trade disputes have become a course of action favored as first resort by domestic metals producers and unions the world over. A sophisticated network of agencies has grown up on the back of it, lawyers, analysts and lobbyists, which can be swung into action if a case looks sufficiently promising. We are not saying many of the cases are not justified; currency manipulation is clearly a major cause of the problems with China; for example, if the Yuan was free floating the U.S. and Europe would have a lot less to complain about. But there are also a large number of cases where the process is used as blatant protectionism. Read more here.