LS, Taihan, Iljin hit by protectionism

Cable makers including LS Cable & System, Taihan Electric Wire and Iljin Electric are struggling to promote their overseas high-voltage cable businesses as they have been coming up against growing trade protectionism in many countries, company officials said Sunday.

With the electric wire industry seen as a core infrastructure business in many countries, Middle Eastern and European nations placing orders are requesting companies meet increasingly demanding requirements, such as making engineers available on site 24 hours a day or obtaining additional product certifications for ones that don’t meet industry standards, according to the officials.

The companies added they have also been encountering language problems. Some countries force bidding companies to use their own language only or make announcements for cable orders in their respective languages, an apparent move to benefit local companies. “The electric wire business, which is mainly the manufacture of cables that carry electric power from power utilities, is considered a key business in many countries because it is the backbone of national infrastructure systems.

To avoid international trade disputes, many countries have been allowing international cable makers to join in bidding, but they are providing visible and invisible advantages to domestic companies,” an official from one of the major cable makers here said. “For instance, some countries are making demanding requests for their new high-voltage cable orders, making it tough for foreign companies to join the bidding process. A country asked bidding companies to operate a liaison office near the location where submarine cables will be installed or maker engineers available 24 hours a day. These are requirements that only domestic companies are able to meet,” the official added.

Company officials said the language barrier means they have to be capable of responding to all possible legal and technical issues in different languages other than English.

“The language barrier is another hurdle for cable makers. Many countries make business announcements for cable orders in their national language or require bidding companies to submit a bid only in that language,” another official said.

“Placing cable orders in English would be okay for us. But when it comes to other languages such as German, Spanish, Italian or Arabic, we face difficulties in participating in the bidding because we need language experts who can respond to every possible legal and technical issue,” he added.

While Japan and Taiwan are only allowing their domestic firms to bid on the new cable orders, the officials urged the government to come up with a measure to encourage the local electric wire industry.

The Ministry of Trade, Industry and Energy designated the local cable makers’ technology to produce ultra-high voltage cables as a core national technology in June. But industry officials said there should be more support for the local industry because the designation is only to prevent technology theft by overseas companies or countries.