Officials have been ordered to reconsider New Zealand Steel's bid to have anti-dumping duties on imposed on Chinese steel imports.
The High Court has quashed a July 2017 decision not to impose the countervailing duties sought on imports of galvanised steel coil and has ordered the Ministry of Business, Innovation and Employment to reconsider NZ Steel's application.
Justice Jillian Mallon ruled the ministry was wrong in advising then-Commerce and Consumer Affairs Minister Jacqui Dean that banks providing loans, or firms supplying inputs such as hot rolled coil, to the Chinese producers did not qualify as being "government" entities. As a result, any benefits they provided did not constitute subsidies, MBIE believed.
Justice Mallon also ruled MBIE incorrectly discounted the findings of other overseas investigations at the time, which had found that the Chinese government had subsidised steel products. Accordingly, the minister's decision was inconsistent with the Trade (Anti-dumping and Countervailing Duties) Act 1988 and therefore unlawful.
NZ Steel, a wholly-owned subsidiary of Australia's BlueScope Steel, is the country's largest steelmaker. It considers that steel manufactured in China is subsidised by the government there and that imports of it cause material damage to the domestic industry. It has lodged three complaints with MBIE to date.
Chinese steel exports have been a bone of contention around the world as US and European producers accused the Asian nation's subsidies and overproduction of undercutting their local industries.
Last month MBIE made a provisional ruling that hollow steel sections imported from Malaysia had been dumped in New Zealand. But the same ruling rejected NZ Steel's complaint that the same type of product imported from China had also been dumped.
MBIE ruled that the more expensive Chinese product had received only minimal levels of subsidy, consistent with its earlier decisions.