Presently, low prices have caused an import expansion of Chinese steel products. Alacero just reported that between January and last May, China exported 3.8 million tons to the region, an increment of 12% over the same period last year. Mexico was among the four countries that increased their imports in this period by 66% annual rate. As forecasted, this is not just a problem for Mexico, which has an exemplary respect to international trade laws. The U.S., Canada and the European Union have already implemented Chinese steel back taxes and increased tariffs. for the moment, Mexico is still conducting workshops with national intustry’s representatives to defend their interests. This month, the Ministry of Economy announced that it will implement retroactive duties on steel products, expand surveillance of temporary steel imports and expedite investigations of dumping.
On behalf of the private sector, these defense strategy seems to be insufficient (Gascon 2015). Arcelor Mittal Mexico, AHMSA, DeAcero and Tubacero, the top 5 steel enterprises in Mexico, have asked the government more drastic measures such as the implementation of a temporary tariff of up to 35% on imports from countries with which Mexico has no trade agreements, like China. Sounds legit is we take in account that the battle is already taking jobs and the CANACERO has warned that sector could dismiss about 7,000 workers in the coming months. Why not implenting a more severe defense strategy?
The Ministry of Energy is between a rock and a hard place, not wanting to further increase import tariffs as this would affect the producers of consumer goods and manufacturers of cars and appliances; the aerospace industry or construction; and Pemex and CFE’s infrastructure plans. And while steelmakers indicate that the effects would not be significant, since 89% of the steel used by the automotive industry comes from countries with which Mexico has international treaties the working tables seeking harmonize interests are heating up and jobs are beign lost. We conclude that no country can properly defend its interest against dishonest trade practices by their own. If international institutions such as the World Trade Organization do not solve and punish promprtly, the panorama seems very complicated.
The steel battle concerns the entire international community, and it is its duty to enforce the rules that have been already assented. Mexico has firmly called, through diplomatic channels, the relevant international agencies to ceace, punished and protect against Chinese unfair practices. The slowdown of its economy is not a reason to intentionally harm international trade. In this case we talk abouta steel battle, but what about other industries such as manufactures? After the recovery from the economic shrink of 2008, Mexican steel industry gave the impression to be able to re-grow due to the growth of auto and housing demand from the automotive industry and housing. Is it going to be plausible?