CAIRO: Minister of Trade and Industry Rachid Mohamed Rachid announced the implementation of anti-dumping duties ranging between 80-86 percent on imports (cif) of Chinese electric motors ranging from 30 horsepower to 100 horsepower, imported from China.
The anti-dumping duty will be applied for five years and the level of the duty will depend on the motor’s horsepower, the ministry said in a statement.
“According to international conventions on anti-dumping and under Egyptian law, if the price of the imported products is less than price or the cost of production in the exporting country, the importing country has the right to launch investigation and take necessary measures to protect its local industries,” said the ministry in a statement justifying its actions.
Law 161 of 1998 protects Egypt’s economy from negative effects of international trade practices.
According to a statement by the ministry, the Anti-Dumping Agency received a complaint in July 2009 from Mohamed Ahmed Dawood Investment Company, a local company that manufactures the same product, claiming that low priced Chinese motors were being dumped in abundance in the Egyptian market, harming local companies.
“The agency then launched an investigation into the matter and inquiries were sent to the import/export companies responsible for bringing the product into the Egyptian market. A copy of the complaint was also sent to the Chinese Embassy in Cairo,” the statement explained.
The investigation found the complaint to be accurate explaining that local companies were being financially harmed by the dumping of the products.
“After the investigation failed to garner a satisfactory response from the concerned parties by June 2010, the committee designated to carry out the investigation decided to show the findings of the report to the minister of trade and industry, Rachid Mohamed Rachid,” the statement added.
The minister eventually decided to enforce the recommendations that accompanied the committee’s report, culminating in the raising of anti-dumping duties on the imported product.
The ministry decided on anti-dumping duties of 85 percent (CIF) on 30 hp and 60 hp motors, 80 percent (CIF) on 40 hp motors, 86 percent (CIF) on 50 hp motors and 83 percent (CIF) on 100 hp motors.
Tarek Selim, an industrial economist and professor at the American University in Cairo, explained the different methods of anti-dumping practices.
“If it is determined that there is real dumping into the market, one solution would be to levy duties on these products, but another option is to subsidize local industry,” said Selim.
Selim pointed out that, dumping or not, that if the Chinese products were introduced into the markets at lower costs, this is an advantage to Egyptian consumers. In light of this, the situation has to be examined carefully before a decision is made.
“It is necessary to ascertain the accuracy of dumping claims by comparing the price of the product in the Egyptian market with the actual price and cost of production in the market of origin,” Selim said.
“Whatever the case, the losses to both consumers and producers have to be measured before a decision is made,” Selim added.
Although he stressed the importance of protecting local businesses, Selim warned that the best way to deal with competitive pricing in the long run is to increase the competitiveness and efficiency of Egyptian industry.
