Focus View
Protection can’t go on indefinitely
FocusM team | 27 Oct 2017 00:30
The government has imposed anti-dumping duties of between 7.27% and 111.61% on imports of cold-rolled stainless steel (CRSS) for 120 days from October. 

This is because preliminary anti-dumping investigations showed CRSS from China, Taiwan, Korea and Thailand was being dumped in Malaysia at prices much lower than in their domestic markets.

This latest move by the government comes in the wake of another one in April when definitive safeguard duties were imposed for steel concrete reinforcing bar (rebar) and steel wire rods, and deformed bar in coils (SWR & DBIC) for three years.

Investigations on imports of these products started in May last year following petitions from the Malaysia Steel Association. The association alleged that the increased imports of both products had seriously affected the domestic industry.

But the question is, for how long can these protective tariffs be in place without seriously affecting our trade with other countries? What if they retaliate with similar tariffs? 

We can understand if it is the issue of dumping. Malaysia has every right to take action if dumping occurs. But can we impose tariffs to protect our industries just because they are inefficient or unable to withstand competition? Isn’t that going against the principles of free trade?

The Malaysian Iron & Steel Federation wants non-tariff barriers in the form of a check on materials at the point of export from countries as part of anti-dumping measures. It suggests that before the materials are imported into Malaysia, they must get the green light and when they reach Malaysian ports, the cargo be checked again. 

Currently, checks are made only at the receiving port by Sirim Bhd. However, Sirim does not have access to the original order documentation and thus has no way of finding out what the original order was.

The government has also set up the Malaysian Steel Council to address the dumping and decreasing margins in the local iron and steel industry.

But at the end of the day, our industries have to ask themselves one important question – are they able to compete with the rest of the world? If they are not, for how long more do they need tariff protection?