Martial Arts "Global Import Regulation New Investigations Decrease by 41% Due to COVID-19"

[Asia Economy Reporter Suyeon Woo] Although new import regulation investigations worldwide have significantly decreased due to COVID-19, there is a possibility that they will increase again as the economy recovers, prompting a call for caution among Korean companies.

According to the '2021 First Half Import Regulation Status and Issues Review' published on the 15th by the Korea International Trade Association's International Trade and Commerce Research Institute, the number of new import regulation investigations initiated globally in the first half of 2021 was 139, a 41% (97 cases) decrease compared to 236 cases in the same period last year.

By product category, the number of new investigations in steel and metals decreased the most, from 111 cases in the first half of last year to 40 cases this year. By country, new investigations decreased the most in the United States (76 cases → 21 cases) and India (59 cases → 25 cases). The main reasons for the decline in new import regulation investigations were ▲ the global trade slump caused by the COVID-19 pandemic ▲ easing of steel regulations due to improved steel market conditions in the U.S. ▲ reduced incentives to initiate new investigations due to tariff exemptions by some countries.

Global Import Regulation New Investigation Initiation Trends (Unit: Cases) / Source=Korea International Trade Association

The Trade Association explained that as global imports, which had been declining since 2019, sharply slowed down last year due to the COVID-19 impact, the number of new import regulation investigations also decreased. Decisions on import regulations are based on import trends over the 1 to 3 years immediately preceding the investigation initiation, so changes in import volumes can affect the number of new investigations initiated later. In fact, data analysis showed a tendency for new import regulation investigations to decrease about two years after a year of import decline.

Additionally, the easing of import regulations on steel and metals, which accounted for 40% of all new import regulation investigations (as of 2020), significantly contributed to the decrease in new investigations this year. In particular, with the improvement of steel market conditions in the United States, the largest complainant country, no new investigations on steel and metals were initiated by the U.S. in the first half of this year. Moreover, China's production cut plans, as the world's largest steel producer, also played an important role.

Furthermore, cases where final tariff imposition measures were not taken despite import regulation rulings have occurred not only in India but recently also in Gulf Cooperation Council (GCC) countries such as Saudi Arabia and Kuwait, as well as Indonesia, leading to a presumed decrease in incentives for filing import regulation complaints and initiating new investigations. In India, among the 59 investigations initiated in the first half of last year, 34 cases did not result in final tariff imposition.

Meanwhile, new investigations targeting Korea totaled 9 cases in the first half of this year, nearly half compared to 16 cases in the first half of last year, but still ranked third after China (34 cases) and Russia (10 cases). The report noted that Turkey has been actively utilizing import regulation measures recently, with 3 out of 10 new investigations initiated in the first half of this year targeting Korea, indicating the need for caution. It also advised close attention to future trends as China and Japan may also strengthen import regulation measures against Korea.

Yujin Lee, Senior Researcher at the Trade Association, pointed out, "Although the number of new global import regulation investigations has decreased, it is difficult to interpret this as a change in the protectionist trend," and forecasted, "If the economy, which worsened due to COVID-19, recovers in the future, import regulation measures may increase again."

This content was produced with the assistance of AI translation services.