Controversy Over Steel Rod Import Tariff Continues

In Costa Rica, importing companies are against the ArcelorMittal proposal, which consists of raising the steel rod income tax from 1% to 15%.

Tuesday, November 6, 2018

On November 5th, a public audience was held in which importing companies and ArcelorMittal presented their arguments before the Ministry of Economy, Industry and Commerce (MEIC) regarding the proposal to raise the import tariff on steel rod by 14%.

Lucrecia Brenes, ArcelorMittal's advisor, said to Nacion.com that "... Costa Rica's imports are from China and Turkey, which have been internationally questioned for subsidizing the steel sector and which sales already have tariffs in Canada, the United States and the European Union (EU), among others."

The article reviews that "... The importers and the Costa Rican Construction Chamber (CCC) argued against the company's request. Their arguments indicate that the price of the rod could increase in the local market if the safeguard or imposition of the entry tax becomes a reality, and that would lead to an increase in the price of construction, with a particular impact on social housing, although they admitted not having a specific investigation in this regard."

The Trade Defense Unit of the MEIC will oversee sending its recommendation next December 2nd to the office of Victoria Hernandez, head of the institution, who also must make the final decision.

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Protectionism vs. Free Market

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In Costa Rica, the government's decision to reject ArcelorMittal's request to raise the import tax on steel rods generated such a conflict that the company assured that "it has no incentive to keep its production in the country."

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Following the request by the company ArcelorMittal de Costa Rica S.A. in November 2017 to the Ministry of Economy, Industry and Commerce (MEIC), to impose a 15% tax on imports of used iron rods for construction, the Costa Rican Chamber of Construction (CCC) reported that since March 19, the MEIC started a process to evaluate whether or not to apply the measure.

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