Government petitioned for safeguard extension

Government petitioned for safeguard extension

Representatives from seven steel and steel-related industries lodging their petition at Government House Monday. (Photo by Apichart Jinakul)
Representatives from seven steel and steel-related industries lodging their petition at Government House Monday. (Photo by Apichart Jinakul)

Seven steel-related associations filed a petition with the government Monday asking for an extension of safeguard measures on imported hot-rolled steel alloy sheets for another three years.

Without the safeguard measures, they claim the steel industry, which comprised 440 companies and a total investment of 200 billion baht, may collapse. This would eventually affect 100,000 employees and pose a risk to financial institutions that have lent the industry 100 billion baht.

Nava Chantanasurakon, chairman for the Association of Thai Hot-Rolled Steel Sheet, said the extension of safeguard measures for another three years until Feb 26, 2022 will not violate World Trade Organization (WTO) rules, which allow members to exercise safeguard measures to protect local industries for up to 10 years.

"Thailand launched the safeguard measures six years ago. We still have room for an extension for another three years as the WTO's rules limit the effective period to 10 years," said Mr Nava.

Hot-rolled steel alloy sheet is a raw material for various industries such as automotive.

Local manufacturers have a total capacity of 7-8 million tonnes for hot-rolled steel sheet, but real production represents 30% of capacity, and hot-rolled steel sheet imports remain as high as 4 million tonnes a year.

"Safeguard measures will help domestic manufacturers stay afloat and competitive, while the buyers can enjoy raw materials at lower prices than imports," he said.

He expects that without the safeguard measure, imported hot rolled-steel sheet will flood the country and may result in the collapse of domestic manufacturers.

Thailand exercised safeguard measures on imported steel for the first time from Feb 27, 2013 to Feb 26, 2016. The measures were renewed from Feb 27, 2016 to Feb 26, 2019.

A safeguard measure according to WTO permits a government to act against an unusual rise in imports of similar goods from trading partners. The measure normally takes the form of additional duties or import quotas.

On Jan 7, the Trade Interests and Remedies Committee's meeting chaired by Deputy Commerce Minister Chutima Bunyapraphasara ruled out extending safeguard measures on imported hot-rolled steel alloy sheet, both coiled and not coiled, after a probe found no injury to the domestic steel industry.

The committee considers the extension of the safeguard measures unnecessary because the investigation showed the import volume and market share of such steel imports dropped, while the domestic sales volume and capacity utilisation increased in 2017 and 2018.

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