Egypt Launches Comprehensive Trade DefenseInvestigation for Steel Sector
The Egyptian government has taken a significant step toprotect its domestic steel industry by launching a safeguard investigation intoimports of hot-rolled flat steel products. The Ministry of Investment andForeign Trade, acting through its specialized Trade Remedies Sector, announcedthe probe following mounting concerns about the surge in foreign steel enteringthe Egyptian market. This investigation represents one of the most powerfultrade defense instruments available under World Trade Organization rules, assafeguard measures can be applied to imports from all countries, unlikeanti-dumping or countervailing duties that target specific nations. The movesignals Egypt's commitment to preserving its industrial base amid challengingglobal market conditions that have seen steel prices fluctuate dramatically inrecent years. Industry analysts note that this investigation could potentiallyreshape Egypt's steel trade landscape, depending on its findings and subsequentpolicy decisions.
Local Steel Giants Unite in Seeking ImportRelief
The safeguard investigation was triggered by a formalcomplaint lodged by two major players in Egypt's steel industry: Al EzzDekheila Steel Company and Al Ezz Flat Steel Company. These companiescollectively represent the entirety of Egypt's domestic hot-rolled steelproduction capacity, giving substantial weight to their petition. According tothe official notice, these manufacturers have presented evidence alleging thata significant increase in steel imports between 2023 and 2024 has causedserious injury to their operations. The unified front presented by theseproducers underscores the severity of the situation from the industry'sperspective. The companies have likely submitted detailed data on productionvolumes, sales, profits, employment, and other economic indicators tosubstantiate their claims of material injury. Their comprehensiverepresentation of the domestic industry simplifies the investigation process,as the impact on the entire sector can be assessed through their combined datawithout needing to account for non-participating producers.
Wide Product Scope Encompasses Twenty CustomsClassifications
The investigation covers an extensive range of hot-rolledflat steel products, spanning twenty different Egyptian customs codes: 7208.10,7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40,7208.51, 7208.52, 7208.53, 7208.54, 7208.90, 7211.14, 7211.19, 7225.30,7225.40, 7226.91, and 7226.99. This broad scope encompasses various types ofhot-rolled flat products, including those of different widths, thicknesses, andalloy compositions. The comprehensive nature of the product coverage suggeststhat the domestic industry is experiencing competitive pressure across itsentire hot-rolled flat steel portfolio rather than in isolated productsegments. The inclusion of so many tariff lines also indicates theinvestigation's significance, as it potentially affects a substantial portionof Egypt's steel imports. For foreign exporters, this broad scope means thatvirtually all suppliers of hot-rolled flat products to the Egyptian marketcould face trade restrictions if safeguard measures are ultimately imposed.
Preliminary Findings Indicate SubstantialImport Growth
After reviewing the initial evidence presented by thecomplainants, the Ministry of Investment and Foreign Trade has determined thatthere are sufficient grounds to proceed with a full investigation. Preliminaryfindings suggest that imports of hot-rolled flat steel products have increaseddramatically both in absolute terms and relative to domestic production duringthe specified period. This dual growth pattern is particularly significant insafeguard investigations, as WTO rules require evidence of either absoluteincreases in imports or increases relative to domestic production, but Egyptappears to have observed both trends simultaneously. While specific importvolumes have not been publicly disclosed at this early stage, the ministry'sdecision to initiate the investigation indicates that the threshold for"significant increase" has likely been met. The preliminaryassessment also suggests a causal link between the import surge and the allegedinjury to domestic producers, though this connection will be more thoroughlyexamined as the investigation progresses.
Investigation Timeline Spans Multiple Years ofMarket Data
The safeguard investigation will analyze market datacovering a period from 2021 through the first half of 2024, with thepossibility of extending the scope to include the second half of 2024 as morerecent data becomes available. This three-and-a-half-year investigation periodis designed to provide a comprehensive view of market trends, allowinginvestigators to distinguish between temporary fluctuations and sustainedstructural changes in import patterns. The inclusion of 2021 data establishes abaseline before the alleged import surge, while the more recent periods capturethe timing and magnitude of the claimed injury. This extended timeframe alsoenables the investigation to account for any seasonal variations in steeldemand and production, ensuring that temporary market shifts are notmisinterpreted as evidence of serious injury. The potential inclusion ofsecond-half 2024 data indicates the ministry's commitment to basing itsdecision on the most current market information available.
Procedural Safeguards Ensure Transparent andFair Process
The Ministry has outlined a structured process for theinvestigation that incorporates several procedural safeguards to ensuretransparency and fairness. Interested parties, including foreign exporters,importers, and downstream users of hot-rolled steel products, are required toregister and provide comments within 30 days of April 27. This stakeholderengagement mechanism allows all affected parties to present their perspectivesand evidence, ensuring that the investigation considers the full range ofeconomic impacts. The process will also include provisions for confidentialityto protect sensitive business information, public hearings to facilitate open discussionof the issues, and on-site verification visits to confirm the accuracy ofsubmitted data. These procedural elements align with WTO requirements for traderemedy investigations and demonstrate Egypt's commitment to conducting athorough and balanced assessment before implementing any protective measures.
Key Takeaways:
• Egypt's Ministry of Investment and Foreign Trade haslaunched a safeguard investigation into hot-rolled flat steel imports covering20 customs codes, following complaints from Al Ezz Dekheila Steel Company andAl Ezz Flat Steel Company that represent 100% of domestic production.
• Preliminary findings indicate imports have increasedsubstantially both in absolute terms and relative to domestic production, withthe investigation examining market data from 2021 through the first half of2024, potentially extending to include the second half of 2024.
• Interested parties must register and provide commentswithin 30 days of April 27, with the investigation potentially resulting inprotective measures such as tariffs or quotas that could significantly impactEgypt's steel trade landscape and downstream industries.
