Ja­pan on warpath over In­dian steel im­port re­stric­tions

The Star Early Edition - - INTERNATIONAL - Yuka Obayashi Tokyo

JA­PAN is threat­en­ing to take In­dia to the World Trade Or­gan­i­sa­tion (WTO) over re­stric­tions that nearly halved its steel ex­ports to the South Asian na­tion over the past year, a step that could trig­ger more trade spats as global ten­sions over steel and other com­modi­ties run high.

Such ac­tion is rare for Ja­pan. The world’s sec­ond-big­gest steel pro­ducer typ­i­cally tries to smooth dis­putes qui­etly through bi­lat­eral talks, but with global trade fric­tion in­creas­ing, Ja­pan’s de­fence of an in­dus­try that sells nearly half of its prod­ucts over­seas is get­ting more vig­or­ous.

Be­sides con­cern over In­dia’s pro­tec­tion of its do­mes­tic steel in­dus­try, Ja­pan is also wor­ried about the more rough and tum­ble cli­mate for global trade be­ing en­gen­dered by US Pres­i­dent Don­ald Trump, and feels it must make a strong stand for open and fair in­ter­na­tional mar­kets.

“We need to stop un­fair trade ac­tions from spread­ing,” said a Ja­panese in­dus­try min­istry of­fi­cial, ex­plain­ing a De­cem­ber 20 re­quest for WTO dis­pute con­sul­ta­tions with In­dia over steel safe­guard du­ties and a min­i­mum im­port price for iron and steel prod­ucts.

In­dia im­posed du­ties of up to 20 per­cent on some hot-rolled flat steel prod­ucts in Septem­ber 2015, and set a floor price in Fe­bru­ary 2016 for steel prod­uct im­ports to de­ter coun­tries such as China, Ja­pan and South Korea from un­der­cut­ting lo­cal mills.

“If con­sul­ta­tions fail to re­solve the dis­pute, we may ask ad­ju­di­ca­tion by a WTO panel,” the in­dus­try min­istry of­fi­cial said. Such ac­tion could come as soon as in 60 days – in Fe­bru­ary – af­ter its con­sul­ta­tion re­quest was filed in De­cem­ber.

Tokyo says In­dia’s ac­tions are in­con­sis­tent with WTO rules and con­trib­uted to the plunge in its steel ex­ports to In­dia, which dropped to 10th-largest on Ja­pan’s buyer list in 2016 to Novem­ber, down from sixth-largest in 2015.

“We are fol­low­ing the WTO guide­lines,” said a top of­fi­cial at In­dia’s steel min­istry, though adding that New Delhi is ready to sit across the ta­ble for trade talks. As of Fri­day, the date of a WTO-led con­sul­ta­tion had not been set.

There has been a se­ries of trade dis­putes over the past few years amid mas­sive ex­ports of cheap steel prod­ucts from China, the world’s top pro­ducer, with Viet­nam, Malaysia and South Africa tak­ing or plan­ning mea­sures to block in­com­ing ship­ments. China’s steel ex­ports dropped by 3.5 per­cent in 2016 to 108 mil­lion tons.

Ja­pan is also mon­i­tor­ing its small vol­ume of im­ports for signs of dump­ing, fear­ing that steel prod­ucts with nowhere to turn be­cause of im­port re­stric­tions may head to its own mar­ket. – Reuters

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