Egypt said on Wednesday it began an investigation into possible dumping of Turkish steel in its market, a move that could violate a free-trade accord between the two states if Egypt takes retaliatory action.
Egypt has been a major regional market for Turkish steel because of its need for housing and state infrastructure spending that has kept steel demand strong through the global economic downturn.
Trade Minister Rachid Mohamed Rachid said on Wednesday that Egypt wanted to ensure Egyptian consumers benefit from fair competition and pay best prices for the commodity, whether it was produced locally or imported.
"At the same time, the ministry wants to protect domestic industry from any illegitimate trade practices," Rachid said in a statement.
Egypt’s Chamber of Metallurgical Industries filed a complaint in August to the anti-dumping authority over what it said was dumping of Turkish steel, saying it hurt domestic industry.
Egyptian steel imports from Turkey picked up strongly earlier this year after global prices fell, although prices on the Egyptian market stayed firm.
Rising Turkish imports in 2009 prompted some Egyptian producers, including Egypt’s largest steel producer Ezz Steel, to call for anti-dumping action.
The trade ministry decided in May not to pursue earlier complaints that foreign producers were dumping in its market after investigations showed no significant harm had been caused to the local industry due to the increase in steel imports.
Egypt and Turkey signed a free trade agreement in 2005.