Johannesburg | Wednesday
SOUTH African steel giant Iscor has welcomed the United States decision to exempt South Africa from three-year tariffs of up to 30% imposed on most US steel imports.
The move, announced by George Bush to protect the US’s ailing steel industry, has provoked swift and angry international reaction.
The European Union said it was lodging a protest with the World Trade Organisation (WTO) and Japanese steel makers immediately criticised the tariffs, which would hit Japan particularly hard.
The new measures exclude countries that have signed free trade agreements with the US. These countries include Canada, Israel, Jordan and Mexico. Other developing countries with limited exports to the United States such as Argentina were also exempted.
Welcoming South Africa’s exemption, Iscor corporate affairs executive Phaldie Kalam said the announcement vindicated the South African steel industry’s argument that it had not caused injury to the US market.
”We have consistently contended that the onerous protectionist measures envisaged by the US steel industry on foreign exports would be counterproductive and contrary to the spirit of the free trade principles embraced by the World Trade Organisation (WTO) to which we are all signatories.
”In terms of WTO principles, as a developing country, we should automatically be exempted from attracting punitive duties provided we remain below a three percent de minimus threshold for South African steel exports into the United States,” she said.
Kalam said it appeared the Bush administration was supporting the growth of developing economies to sustain themselves rather than rely on the intervention of G7 nations.
Since the beginning of 1998, 31 US steel mills – about half the industry – have gone bankrupt or applied for bankruptcy protection, according to the American Iron and Steel Institute.
Bush’s decision was taken under Section 201 of the 1974 trade law, which lets the president impose punitive tariffs on imports found to have caused injury to the US’s domestic industry.
”Today I am announcing my decision to impose temporary safeguards to help give America’s steel industry and its workers the chance to adapt to the large influx of foreign steel,” Bush said in a statement.
”I take this action to give our domestic steel industry an opportunity to adjust to surges in foreign imports, recognising the harm from 50 years of foreign government intervention in the global steel market, which has resulted in bankruptcies, serious dislocation and job loss.”
US steelmakers, which had called for 40% import tariffs across the board for four years, celebrated.
The measures included 30% tariffs on flat steel, hot-rolled bar and cold-finished bar and tin mill products – accounting for the majority of imports.
Tariffs of 15% were slapped on stainless steel bar, stainless steel rod, rebar and certain tubular products. Tariffs of 13% were put on carbon and alloy fittings and flanges. An eight percent tariff was put on stainless steel wire. All the tariffs will decline slightly over the three years. – Sapa