In order to enhance the steel industry in Colombia and guarantee its competitiveness at a global level, the Government has launched the Pact for Steel, an initiative that seeks to offer equitable conditions to compete in the market, improve the added value of the sector. and promote its transformation into a long-term export industry.
With Decree 1294, issued on October 18, 2024, the president established trade defense measures in conjunction with the private sectorincluding the creation of a flat steel factory with clean technologies. The objective is to develop an industry that promotes productive chains and strengthens the country’s business fabric.
Measures against unfair practices
The Minister of Commerce, Industry and Tourism, Luis Carlos Reyes Hernández, explained that the implementation of these measures seeks to guarantee fair competition for the national industry, affected in recent years by an increase in imports at low prices from countries with which that Colombia does not have current trade agreements.
“With this decree, unfair trade is combated and the industry is protected from unexpected and unjustified fluctuations in imports that have caused a great negative impact,” stated Reyes Hernández.
You may be interested: Household spending in Colombia continues to be fragile and unequal, according to Raddar
As part of this strategy, a 30% ad valorem tariff levy was imposed on imports of iron or steel wire rod from countries without trade agreements with Colombia, in addition to the 5% Most Favored Nation tariff. This measure, recommended by the Higher Council of Foreign Trade and the Customs Affairs Committee, will be in force for two years.
Impact on local industry
According to a study by the Ministry of Commerce, Industry and Tourism, imports of iron or steel wire rod increased by more than nine percentage points in recent years, reducing sales prices by up to 16.7%. This significantly affected the national industry, whose products were at a disadvantage compared to those of foreign origin.
The Petro Government is committed to the industrialization of the country, and as part of the Pact for Steel, joint work has begun with steel companies to build a flat steel production plant. This plant not only seeks to satisfy domestic demand for steel, but also has the potential to turn Colombia into a global leader in the production of steel with high added value.
“In a global context where decarbonization is crucial, creating a plant that uses clean technologies and reduces carbon emissions would put us in a competitive position to export sustainable steel,” highlighted Reyes.
The flat steel plant project is still in the feasibility study phase, the results of which are expected in the first quarter of 2025. This study will include aspects such as the demand for steel in Colombia and in the region, price trends, production costs, and the environmental impact of the project.
You can read: The reason for the almost double increase in energy prices in Colombia