Posted on 26 Dec 2014
The government has rejected Japan's request to increase its quota for tariff-free steel imports — and risked angering Tokyo by cutting its quota by half. Japanese steel importers had requested the...
Japanese steel importers had requested the government increase its 2015 quota for duty-free imports of three types of high-quality steel from this year's level of 1.22 million tonnes.
But the government is set to announce that Japan's quota will be reduced to only 530,000 tonnes.
Imported Japanese steel outside the quota will be taxed at 5-10%, depending on its type.
The Japanese will ask for a review immediately, an industry source said.
Japanese investors are really upset with the result of negotiations even though the government has promised a mid-year review.
"Japan has always received a high duty-free quota for steel — even higher than the volume used here by Japanese car makers — but next year's quota will be cut to less than half the previous quota. They must be upset," the source said.
"They will seek ways to oppose the decision and not wait until mid-2015 to seek a review."
A Japanese steel user said the government should acknowledge the impact on Thailand's automotive industry if Japanese car makers cut their production here.
The quota request was made through the Japanese government several months ago in line with an expected increase in demand for three types of high-grade steel — Q9, Q10 and Q11 — alongside an improvementin the automotive industry in Thailand.
Four meetings were held between the two governments. Thailand had offered a duty-free quota of 668,000 tonnes after Japan asked for more than 1.5 million tonnes. However, after the final meeting in Tokyolast month, Thailand cut the quota to 530,000 tonnes.
UdomWongviwatchai, director-general of the Office of Industrial Economics, said the government hoped to see Japan's steelmakers keep their promise to transfer knowledge and conduct training courses forthe Thai steel industry before giving them a bigger quota.
"They haven't yet done what they promised us a decade ago even though they got everything they asked us for. So if they want to ask for more, they should do what they promised us first. The governmentis ready to review the quota in mid-2015," he said.
Mr Udom said the previous quota given to Japan had been more than the real demand of Japan's car makers in Thailand.
