Posted on 10 Feb 2015
The government has imposed a
safeguard duty on imported construction steel to curb a sharp rise in shipments
into the local market, shipments that are hurting the domestic industry.
The measure is set to last for three years, from Jan. 21 this year to Jan. 20,
2018, according to a press statement from the Trade Ministry circulated on
Monday.
In the initial year, the products affected — I-shaped and H-shaped sections —
will be charged with safeguard duties set at 28 percent of their prices. The
import duties will be lowered to 26 percent and 18 percent respectively in the
second and the third years.
Indonesian Trade Security Committee (KPPI) chief Ernawati said that the jump in
imports of I and H sections of other steel alloys had negatively affected the
domestic industry because of the loss of the market share taken by the
increased imports, a rise in inventory and losses, Ernawati said.
“The KPPI proves that there is a causal link between a surge in import volume
and the serious injury experienced by the applicant,” she said in the
statement.
The local industry is represented by one petitioner, major steel maker PT
Gunung Garuda, which controls the biggest share in the domestic market.
The safeguard measure is a procedure under the World Trade Organization (WTO)
that permits a government to act against an unusual increase in imports of
similar goods from trading partners. The temporary measure normally takes the
form of additional duties or import quotas lasting several years.
The committee launched the official investigation into the case on Feb. 12 last
year after Gunung Garuda complained about a serious injury posed by a surge in
imports.
The enquiry found out that from 2010 to 2013 imports of I-shaped and H-shaped
steel surged significantly from a low level of 20,331 tons in 2010 to 395,814
in 2013, according to the committee.
The safeguard duties will apply to key suppliers: China (with a share of 96.62
percent), South Korea (1.56 percent) and Singapore (0.96 percent).
Gunung Garuda executives did not reply to The Jakarta Post’s request for
comment.
Indonesian Iron and Steel Industry Association (IISIA) executive director
Hidayat Triseputro welcomed the committee’s move to impose the safeguard
duties, saying that it would serve as a temporary means to help the affected
firm survive the injury.
“That’s the right measure because the firm needs a temporary cure to recover
from the injury,” he said. He also expected that the local industry could meet
domestic demand.
At present, the I-shaped and H-shaped sections are also produced by PT Krakatau
Wajatama, as well as by Gunung Garuda.
Iron and steel products are prone to trade disputes worldwide. Indonesian
producers like state-owned PT Krakatau Steel have repeatedly been accused of
dumping their products overseas. In the same way, Indonesia also aims such
charges against foreign manufacturers.
