The Saudi General Authority for Foreign Trade announced today (Thursday) a decisive step aimed at protecting domestic industry by launching a formal anti-dumping investigation into imports of epoxy resins. This investigation covers products originating from or exported by four major Asian industrial nations: the People's Republic of China, the Republic of India, the Republic of Korea, and Taiwan.
legal and legislative framework
The decision to initiate the investigation was based on the powers granted to the Authority in accordance with the Trade Remedies in International Trade System, issued on November 23, 2022. Paragraph 1 of Article 4 of this system stipulates that the Authority shall undertake trade remedies, which include conducting investigations and reviews and imposing the necessary measures in accordance with the Kingdom’s international commitments, specifically its obligations to the World Trade Organization (WTO), particularly the Anti-Dumping Agreement, the Subsidies and Countervailing Measures Agreement, and the Safeguards Agreement.
The importance of epoxy resins and the local industry
Epoxy resin is a vital chemical material used in numerous manufacturing and construction industries, such as paints, adhesives, electronics, and building materials. This move comes at a time when the Kingdom is witnessing significant industrial development as part of Vision 2030, which aims to localize industries and increase local content. Flooding the market with imported products at below-market prices causes serious harm to Saudi factories producing this material, potentially leading to their collapse or exit from the market, which contradicts the strategic objectives of the national economy.
The global economic context and the impact of the decision
This investigation comes in a global context characterized by increasing trade protectionism and the use of trade remedies by countries to protect their markets from unfair competition. The countries under investigation (China, India, South Korea, and Taiwan) are among the world's largest exporters of chemicals and often possess excessive production capacities that may lead to the dumping of surpluses on open markets at dumping prices.
The Saudi system aims, through this measure, to achieve three main objectives: protecting domestic industry from material harm caused by dumped and subsidized imports, preventing a sudden surge in imports that could disrupt the market, and defending the Kingdom's exports, which may be subject to similar measures abroad. This investigation is expected to contribute to restoring balance to the domestic market and ensuring fair competition that allows national products to grow and expand, thereby strengthening the Saudi economy and its attractiveness to industrial investments.
