World

Asian giants in steel row

Tokyo steps up defence of steel industry, threatens 
to take India to WTO over 'unfair trade actions'

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 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 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.

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 Dec 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 per cent on some hot-rolled flat steel products in September 2015, and set a floor price in February last year 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 official said.

Such action could come in as soon as 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 last year through November, down from sixth-largest in 2015.

"We are following the WTO guidelines," said a top official at India's steel ministry, 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 per cent last year to 108 million tonnes, about as much as Japan produces in a year.

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

"All trades need to be fair. If there are trades that violate the rules, we will take necessary actions while consulting with our government," Mr Kosei Shindo, chairman of the Japan Iron and Steel Federation, told a news conference on Friday.

But in an environment where a new US president is threatening to tear up trade treaties and impose import duties in the world's biggest economy, Tokyo may be at risk of helping to set off a trade war it is trying to avoid.- REUTERS

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