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AFRICA
MONTH CELEBRATIONS: TRADE WITH AFRICA
Since the lifting of
sanctions and the re-admission of South Africa following the 1994 elections,
the South African economy was opened to global trade and investment, which
increased competitive pressure on domestic manufacturing. A logical
response to this for exporters/manufacturers would be to get involved in
international trade in order to reclaim some part of their market share.
One would also have expected that South Africa’s trade with its neighbours
would have increased substantially. But was this the case?
Trade liberalization
following GATT 1994/WTO 1995 and the resultant reduction in customs duties
and abolishment of quantative import control has also contributed to the
opening of the South African market. However, it also opened other markets
for South African products. And competition in other markets intensified for
South African exporters/manufacturers.
According to South
Africa’s 20 Year Review 1994 to 2014 the opening of the economy associated
with the transition to democracy saw a substantial increase in both exports
and imports. The result was an increase in the trade and current account
deficit from the early 2000’s, with a sharp increase in imports which
outstripped increased exports – despite the weakening of the South African
Rand in 2001..
The global recession
of 2008 led to a marked decline in both exports and imports in volume terms;
thereafter, imports climbed much faster than exports, leading to a worsening
current account balance. In South Africa there were also zenophobic attacks
in 2008 which would have had an influence on South Africa’s trade with its
neigbours.
According to the 20
year review, exports fell from 31 percent in mid-1985 to 21 percent in
mid-1994 as a percentage of the GDP. For most of the next 20 years, exports
climbed on the back of the global commodity boom, growing motor vehicle
sales and opening of the economy in general. Mining accounted for more than
50 per cent of exports. Exports again reached 31 percent of the GDP in
2008. The 2008-crisis brought a 23 percent fall in the volume of exports.
The volume of exports was still below the 2008 peak in 2013. Exports were
hampered by falling world mineral prices from 2011, major strike action in
mining and the motor vehicle industry, and the rising cost of electricity,
amongst others. Unfortunately many of these events are occurring regularly.
The Review states
that Imports were around 20 percent of GDP through the 1980s. They then rose
fairly steeply, increasing from 19 percent in mid-1994 to 41 percent in
mid-2008. Like exports, imports fell from 2008 to 2009 by 23 percent, but
then they recovered strongly, growing by some 47 percent to reach 36 percent
of the GDP. The biggest factor behind rising imports was petroleum, which
climbed from 10 percent of imports in 1995 to 22 percent in 2013, accounting
for almost a quarter of the total increase in imports and rising from 2
percent of the GDP to 6 percent. Machinery and equipment, personal cars and
medical equipment and medicines were the most important imports following
fuels.
Besides South
Africa’s SACU-partners, our biggest trade partners are still the USA,
Germany, Japan, Zimbabwe and China for exports and China, Germany, the USA,
Japan and India for imports.
About 90% of South
Africa's exports to Africa go to the SADC economies. In 2011, Wikipedia
states that South Africa’s trade with the rest of Africa exceeded R220
billion (approx. USD30bn) which amounted to 17% of SA’s total trade with the
world. This amounted to a R40 billion trade surplus for South Africa
compared to a R68 billion deficit with Asia. South African exports to the
rest of Africa are predominantly of value-added goods. The country's
investment stock in Africa has increased from R14.7 billion in 2001 to R121
billion in 2010, amounting to 21% of its total outward Foreign Direct
Investment.
There is certainly
room for improvement in our trade with Africa. However, xenophobic attacks
and our relationship with fellow-Africans in South Africa must have a
negative effect on trade with our neighbours.
DRAFT CUSTOMS
DUTY RULES PUBLISHED FOR COMMENTS (Comments due by 5 June 2015)
The Draft Rules to Chapters 1, 3 to 9 and 11 to 13 of the Customs Duty Act,
2014 (Act 30 of 2014) were published for comments. The Draft Rules to
Chapters 2 of the Customs Duty Act covering the Customs Tariff and Chapter
10 covering advance rulings will be published at a later stage.
SARS Customs has
requested interested parties to use the Comment Sheet template to submit the
comments (by no later than 5 June 2015). The Comment Sheet and the Draft
Rules can be downloaded from the SARS website at
http://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Draft-Documents-for-Public-Comment.aspx |
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Customs Tariff
Applications and
Outstanding Tariff Amendments
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The International Trade Administration
Commission (ITAC)
is responsible for tariff investigations, amendments, and trade
remedies in South Africa and on behalf of SACU.
Tariff investigations include: Increases
in the customs duty rates in Schedule No. 1 Part 1 of Jacobsens.
These applications apply to all the SACU Countries, and, if
amended, thus have the potential to affect the import duty rates
in Botswana, Lesotho, Namibia, Swaziland and South Africa.
Reductions in the customs duty rates in
Schedule No. 1 Part 1. These applications apply to all the SACU
Countries, and, if amended, thus have the potential to affect
the import duty rates in Botswana, Lesotho, Namibia, Swaziland
and South Africa.
Rebates of duty on products, available in the
Southern African Customs Union (SACU), for use in the
manufacture of goods, as published in Schedule No. 3 Part 1, and
in Schedule No. 4 of Jacobsens. Schedule No. 3 Part 1 and
Schedule No. 4, are identical in all the SACU Countries.
Rebates of duty on inputs used in the
manufacture of goods for export, as published in Schedule No. 3
Part 2 and in item 470.00. These provisions apply to all the
SACU Countries.
Refunds of duties and drawbacks of duties as
provided for in Schedule No. 5. These provisions are identical
in the all the SACU Countries.
Trade remedies include: Anti-dumping
duties (in Schedule No. 2 Part 1 of Jacobsens), countervailing
duties to counteract subsidisation in foreign countries (in
Schedule No. 2 Part 2), and safeguard duties (Schedule No. 2
Part 3), which are imposed as measures when a surge of imports
is threatening to overwhelm a domestic producer, in accordance
with domestic law and regulations and consistent with WTO rules.
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Dumping is
defined as a situation where imported goods are being sold at
prices lower than in the country of origin, and also causing
financial injury to domestic producers of such goods. In other
words, there should be a demonstrated causal link between the
dumping and the injury experienced.
To remedy such unfair pricing, ITAC may, at
times, recommend the imposition of substantial duties on imports
or duties that are equivalent to the dumping margin (or to the
margin of injury, if this margin is lower).
Countervailing investigations are
conducted to determine whether to impose countervailing duties
to protect a domestic industry against the unfair trade practice
of proven subsidised imports from foreign competitors that cause
material injury to a domestic producer.
Safeguard measures,
can be introduced to protect a domestic industry against
unforeseen and overwhelming foreign competition and not
necessarily against unfair trade, like the previous two
instruments.
In the WTO system, a member may take a
safeguard action, which is, restricting imports temporarily in
the face of a sustained increase in imports that is causing
serious injury to the domestic producer of like products.
Safeguard measures are universally applied to all countries,
unlike anti-dumping and countervailing duties that are aimed at
a specific firm or country.
There were no new
ITAC applications at the time of publication of the Customs
Bulletin. |
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Customs Tariff Amendments
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With the exception
of certain parts of Schedule No. 1, such as Schedule No. 1 Part 2 (excise
duties), Schedule No. 1 Part 3 (environmental levies) Schedule No. 1 Part
5 (fuel and road accident fund levies), the other parts of the tariff is
amended by SARS based on recommendations made by ITAC resulting from the
investigations relating to Customs Tariff Applications received by them.
The ITAC then investigates and makes recommendations to the Minister of
Trade and Industry, who requests the Minister of Finance to amend the
Tariff in line with the ITAC’s recommendations. SARS is responsible for
drafting the notices to amend the tariff, as well as for arranging for
the publication of the notices in Government Gazettes.
During the annual
budget speech by the Minister of Finance in February, it was determined
that parts of the tariff that are not amended resulting from ITAC
recommendations, must be amended through proposals that are tabled by the
Minister of Finance.
Once a year big
tariff amendments are published by SARS, which is in line with the
commitments of South Africa and SACU under international trade
agreements.
Under these
amendments, which are either published in November or early in December,
the import duties on goods are reduced under South Africa’s international
trade commitments under existing trade agreements.
The following tariff
amendments were published in Government Gazette 38804 dated 22
May 2015.
1. Rebate items
460.01/03.04/01.04 and 460.01/16.04/ 01.04 in Part 2 of Schedule No. 4
are amended by providing for a full rebate of duty for the importation
of fish as requested by the DG: Agriculture, Forestry and Fisheries. (Government
Gazette 38804, R. 426 22.05.2015 A4/2/370)
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2. Note 2 in Schedule No 6
is amended to add rebate items 620.03 and 622.05 to exempt other
fermented beverages and tobacco products supplied to the President,
diplomats and other foreign representatives from registration in terms
of rule 59A (Government Gazette 38804, R. 427 22.05.2015 A6/33)
3. Rebate item
619.07/104.10.20/01.01 is inserted to provide for a rebate on beer made
from malt, used in the manufacture of non-alcoholic beverages (Govern-ment
Gazette 38804, R. 428 22.05.2015 A6/1B/01)
4. Note 4 in Part 1 C of
Schedule No. 6 is amended to remove the reference to “commercial use”,
and to insert of rebate items under 620.21/104.17 to provide for a
rebate of excise duty on other fermented beverages to be used in the
manufacture of non-alcoholic beverages (Government Gazette 38804,
R. 429 22.05.2015 A6/1C/40)
5. Rebate item 621.11 is
amended to include spirits used in the fortification of other mixtures
of fermented fruit or mead beverages, fortified with an alcoholic
strength of at least 15% by volume, but not exceeding 23% by volume. (Government
Gazette 38804, R. 430 22.05.2015 A6/1D/03)
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Customs Rule Amendments
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The Customs and
Excise Act is amended by the Minister of Finance. Certain provisions of
the Act are supported by Customs and Excise Rules, which are prescribed
by the Commission of SARS. These provisions are numbered in accordance
with the sections of the Act. The rules are more user-friendly than the
Act, and help to define provisions which would otherwise be unclear and
difficult to interpret.
Forms are also
prescribed by rule, and are published in the Schedule to the Rules.
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Forms are also
prescribed by rule, and are published in the Schedule to the Rules.
There were no Rule
amendments at time of publication.
The last rule
amendment (DAR/144) was published on 27 March 2015 in Government Gazette 38603 under Notice R. 246.
Download the latest Customs Watch to have access to the
latest tariff and rule amendments.
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