GOVT CAN NOW RESTRICT IMPORT OF CERTAIN PRODUCTS UNDER NEW ACT

2013-09-05

PETALING JAYA: The Government can now slap emergency import restrictions on certain products to protect local industries under the new Safeguard Act (Amendment) 2012 which came into force on Sept 1.

The Ministry of International Trade and Industries (Miti) said the act, an amendment to the current Safeguard Act 2006 (Act 657), allowed intervention by the authorities when local industries were threatened by cheap imports.

Under the act, it said Malaysia was allowed to invoke safeguard measures based on the provisions in its bilateral or regional free trade agreements.

According to the World Trade Organisation (WTO) agreement on safeguards, a member country may take such action to protect specific domestic industries from an increase in imports of any product which is causing, or is threatening to cause serious injury to the industry.

Although these measures could not target imports from a particular country, it said quotas could be allocated upon supplying countries, including during circumstances when imports from certain countries had increased disproportionately quickly.

Miti said the previous act only allowed Malaysia to initiate an investigation and impose safeguard duty on a global basis on all imports of an affected product, irrespective of the source and without discrimination.

In Malaysia’s case in particular, the dumping of steel products at low prices from countries like China has been rampant in the past, and the Government has been imposing anti-dumping duty on these products via the Countervailing and Anti-Dumping Duties Act 1993.

Recently Miti imposed anti-dumping duties from 3.03% to 25.2% on steel wire rods from selected companies in China, Taiwan, South Korea and Indonesia from Feb 20 this year for five years.

Miti launched an anti-dumping investigation last June based on a petition by Amsteel Mills Sdn Bhd on behalf of the steel wire rods industry.

Local steel players were reported to be badly hit as the cheap steel products flooded the market.

Malaysian Iron and Steel Industry Federation president Datuk Soh Thian Lai reportedly said in April that the trade measures taken by the Government to curb the import of cheap steel products were expected to cut yearly import volumes by at least one third or more than one million tonnes.

Steel manufacturers are still struggling to sustain earnings growth as they still have to compete with cheap imports, and wire rods are traded at the depressed levels RM2,100 to RM2,200 per tonne compared with RM2,400 to RM2,500 a year ago.

Recently, the United States had proposed to impose a 54.5% anti-dumping duty on Malaysian shrimps to take effect on Oct 1, 2013, which would make the local shrimp industry to stand to lose over US155mil (RM511mil) in yearly revenue.

Source: STARBIZ 4 September 2013

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