Colombia raises duties on wire rod imports from non-FTA countries

The Colombian government raised duties on imports of wire rod from countries with which it does not have free trade agreements to 35% from 5% for two years, hoping that local steel producers will be able to compete on equal terms.

The measure was signed on Friday and was published in the official gazette on Monday.

The 35% is the maximum allowed by the World Trade Organization (WTO) and will apply to low-carbon wire rod, which is used for construction, and also for barbed wire, clamps and welded wire mesh, which is key to earthquake-resistant construction.

“Through measures like this, we seek to guarantee fair competition for the national industry, as we combat unfair trade practices and the sharp, unexpected and unjustified increases in imports at low prices that may occur in the country,” trade, industry and tourism minister Luis Carlos Reyes said in a statement.

Among the countries with which Colombia does not have a free trade agreement and to which the new tariff will apply are China, Russia, Vietnam, Turkey and India.

"We welcome this measure, which represents support for an industry whose sustainability was threatened by unfair competition," Daniel Rey, president of the steel producers' committee of Colombian business association ANDI, told BNamericas.

Rey added that the measure would be reviewed annually because the market is always changing but the sector will be alert to any other distortion that may arise.

FLAT STEEL PLANT

Reyes added that the measure comes at a time when the government is seeking to have the private sector build a flat steel plant with clean technologies and with the highest added value, which will also boost productive chains and strengthen the industry.

The Gustavo Petro government considers the project to be crucial to strengthen reindustrialization, formalize the extraction of metallurgical coal, and improve the efficiency and environmental and social standards of clean coke production.

The Colombian steel industry is responsible for carrying out the feasibility study for the plant.

Colombia currently produces 1.3-1.4Mt/y of long steel. The industry generates around 50,000 direct and indirect jobs and uses scrap reduction technology, with the exception of Acerías Paz del Río which produces steel from reduced iron ore.