Academics back steel tariff delay

A proposal last week by the International Trade Commission to delay imposition of anti-dumping tariffs on H-shaped beam imports because of a shortage in local supplies triggered sharp protests from local manufacturers, but is drawing praise from academics and consumer activists.

The International Trade Commission prepared the proposal for the Ministry of Finance. The commission suggested that in light of a shortage of domestically-produced H-shaped beams caused by the 921 earthquake and the resulting price fluctuations for steel, the MOF should temporarily suspend its plan to impose anti-dumping tariffs on Japanese, South Korean, Russian and Polish beam imports.

Local steel manufacturers are adamant that the tariffs should be imposed.

But Wu Chung-chi (吳忠吉), an industrial economist at National Taiwan University (NTU), said that the tariff plan should be suspended so the international steel community can help with Taiwan's post-earthquake reconstruction.

"No one would have expected the earthquake," said Wu, implying that even though local steel producers were fully capable of meeting local demand in ordinary times, the situation now is very different. Demand generated by the reconstruction efforts may increase a hundred times above present levels, he said. As a result, the price of steel is inevitably going to rise.

According to Wu, the imposition of the steel tariffs "would only increase unnecessary costs in the reconstruction."

"The total demand may still very likely outstrip supply, even if the MOF decides not to impose the tariffs. Therefore, local manufacturers would still benefit from price increases, though less than what they would like," he added.

Wu stressed that a decision on the tariffs needs to be made immediately. Otherwise, he said, local manufacturers would be able to make an "earthquake profit."

Lu Hsin-Chang (盧信昌), a member of the Consumer Foundation and associate professor at International Business Graduate School at NTU, agrees that consumers and suppliers would both benefit if the tariffs were not imposed.

"To impose import tariffs on steel is to increase cost for manufacturers, and therefore, to some extent, decrease the manufacturers' international competitiveness to export. As for consumers, paying less is pleasant, of course," Hsin said.

In addition, he said, "in order to become a member of the World Trade Organization, such tariffs will have to be removed. Taiwan can also use this chance to make trading friends."