Why are domestic steel enterprises worried about being 'strangled'?

The Vietnam Steel Association (VSA) proposes to the Government, ministries and branches to consider developing processes and procedures for checking the quality of steel imported into Vietnam. Photo: TL
This makes many steel enterprises worry about being strangled. This is an ongoing situation that has just been mentioned by the Vietnam Steel Association (VSA) in a petition to the Prime Minister, the Ministry of Industry and Trade, and the Ministry of Science and Technology.

Data from VSA shows that in the first 6 months of 2023, "steel enterprises" had difficulties in producing and consuming all kinds of finished steel, decreasing by 20% and 18%, respectively.

In the first 5 months of the year, Vietnam had a trade deficit of more than 220,000 tons of steel with a trade deficit of $480 million. Significantly, the amount of "steel imports from China" into Vietnam is on the rise again.

VSA's point of view is that steel is a commodity with a large amount of imports and is a backbone industry, so the quality of steel affects many different economic sectors.

Currently, steel products are not in the list of group 2 items of the Ministry of Industry and Trade, importers only need to declare the applicable standards and are not subject to specialized inspection for quality.

While countries around the world are increasing the application of technical barriers and trade remedies to protect domestic industries, such as: Thailand, Indonesia, Malaysia, Korea, India, Australia, UK... all increased the application of technical barriers.

Specifically, products when exported to these countries require a certificate of compliance with the quality standards of the importing country for products that meet the standards of the importing country.

The objective of these permits is to prevent the import of poor quality products, and to strengthen control over imported steel.

Currently, the conditions for importing steel are very "loose".

Almost all steel products imported into Vietnam have import tax of 0%.

Trade remedies such as steel billet safeguards have been removed, other steel products such as galvanized steel sheets, colored corrugated iron, steel pipes, prestressed steel... are not subject to any trade remedies. .

At the same time, steel products are not on the list of group 2 goods under the decision of the Ministry of Industry and Trade, so they are not subject to specialized inspection on product quality.

The import of steel products into Vietnam does not have the same quality inspection process as other countries. This leads to a variety of imported steel in terms of types and quality, which has not been assessed for conformity with Vietnamese standards, and has not yet been controlled for quality and types.

With the above problems, VSA proposed to the Government, the Ministry of Industry and Trade, and the Ministry of Science and Technology four groups of solutions.

Firstly:  Consider building a process and procedures for checking the quality of steel imported into Vietnam, whereby imported steel needs to have a certificate of compliance with Vietnam's quality standards before being imported.

Second:  Strengthen the investigation and application of appropriate trade remedies to limit unfair competition in steel products and protect the domestic steel industry.

Third:  Developing and promulgating the National Technical Regulation on metallized corrugated iron and color coated steel.

Fourth:   Ministries and sectors strengthen warning and forecasting of commodity market trends, contributing to supporting the stable development of domestic production.

Data from the General Statistics Office shows that although imports of iron and steel in the first half of 2023 decreased sharply, only by 67.7% over the same period, imports of iron and steel products were equal to 94.6%, but total import expenditure steel of all kinds is approximately 7.2 billion USD (in which iron and steel 5.5 million tons, worth 4.72 billion USD, products from iron and steel reached 2.44 billion USD).

While the export of iron and steel and products from iron and steel reached USD 6.17 billion, down about 18%, trade deficit of the steel industry was about USD 1 billion.

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