ADDITIONAL
DUTIES IMPOSED ON IMPORTS OF CERTAIN STEEL PRODUCTS INTO SOUTH AFRICA
Finance
Minister Malusi Gigaba approved measures to restrict the importation of
certain steel products for the next three years in order to protect the
domestic steel industry from cheap imports by imposing a safeguard duty on
certain steel commodities.
Safeguards
are actions temporarily imposed on imports expected or likely to cause
serious damage to a domestic industry competing with the imported goods.
The World
Trade Organization (WTO) Safeguards Agreement is one of three principal
trade defense agreements. The Southern African Customs Union (SACU) Members,
Botswana, Lesotho, Namibia, South Africa and Swaziland are party to all of
them.
South
Africa is a founding Member of the World Trade Organisation (WTO), 1994 and
its successor, the General Agreement on Tariff and Trade (GATT), 1947.
South
Africa is also a signatory to various WTO Agreements, for example the World
Trade Organization (WTO) Anti-dumping Agreement, Agreement on Subsidies and
Countervailing Measures and Safeguards Agreement.
Safeguards
allow a WTO member to temporarily restrict imports of a product to protect a
specific domestic industry. This could occur because unforeseen surges in
imports cause or threaten to cause serious damage to that particular
industry.
The
agreements above relate to measures of trade remedies, and in terms of our
commitments under the agreements above, the WTO needs to be notified of any
proposed remedial actions.
(For
background information, refer to the articles on anti-dumping duties,
countervailing duties and safeguard duties in the Jacobsens Customs News
Bulletins of 9 June 2017 and 20 June 2017).
Measures
can be applied under the Safeguards Agreement providing that all the
following conditions prevail and apply during the term of the measures:
-
they
only apply for a temporary period;
-
they
are only imposed when the imports are found to cause or threaten serious
injury to a competing domestic industry;
-
they
are applied to imports from all sources on a non-selective basis;
-
the
measures are progressively liberalized while in effect, the member
imposing the safeguards may be required to compensate the members whose
trade is affected.
Until today
there were no safeguard duties in the Southern African Customs Union
Tariff. Not at this stage anyway. There have been before, but they have
come and gone.
South
Africa notified the WTO Committee on Safeguards of findings of serious
injury or threat thereof caused by the increased imports and proposed
safeguard measures in line with WTO document G/SG/W/1 dated 23 February
1995.
South
Africa’s notification to be circulated was dated 24 April 2017, and the
WTO‘s Committee on Safeguards notified members of the Proposed Safeguards
under a circular dated 27 April 2017.
The
International Trade Administration Commission of South Africa (ITAC)
initiated an investigation for remedial action in the form of a safeguard
against the increased imports of certain flat hot-rolled steel products on
26 March 2016.
ITAC
communicated its proposed preliminary determination to the WTO on 18 July
2016.
The
preliminary determination was published in the Government Gazette on 22 July
2016.
The
Committee on Safeguards was notified of the initiation of the investigation
and the preliminary determination. The Committee notified other Members of
the Agreement in WTO documents (G/SG/N/6/ZAF/4 and G/SG/N/8/ZAF/3).
The product
subject to investigation is described as certain flat-rolled products of
iron, non-alloy steel or other alloy steel (not including stainless steel),
whether or not in coils (including products cut-to-length and 'narrow
strip'), not further worked than hot-rolled (hot-rolled flat), not clad,
plated or coated, excluding grain-oriented silicon electrical steel,
imported under Harmonized System tariff subheading 7208.10, 7208.25,
7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40, 7208.51,
7208.52, 7208.53, 7208.54, 7208.90, 7211.14, 7211.19, 7225.30, 7225.40,
7225.99, 7226.91 and 7226.99. (The original notification was given under HS
2012 and Customs administrations are now using a new version of the HS, HS
2017. None of the subheadings were affected by the transposition).
See the HS
descriptions of the products in question: (Only the under-lined
products are affected)
HS Code (Heading / Subheading Code) |
HS Description |
|
|
72.08 |
Flat-rolled products of iron or non-alloy steel, of a width of 600
mm or more, hot-rolled, not clad, plated or coated |
|
|
72.11 |
Flat-rolled products of iron or non-alloy steel, of a width of less
than 600 mm, not clad, plated or coated: |
7211.1 |
- |
Not further worked than hot-rolled: |
7211.13 |
- |
- |
Rolled on four faces or in a closed box pass, of a width exceeding
150 mm and a thickness of not less than 4 mm, not in coils and
without patterns in relief |
7211.14 |
- |
- |
Other, of a thickness of 4,75 mm or more |
7211.19 |
- |
- |
Other |
|
|
72.25 |
Flat-rolled products of other alloy steel, of a width of 600 mm or
more: |
7225.1 |
- |
Of silicon-electrical steel: |
7225.11 |
- |
- |
Grain-oriented |
7225.19 |
- |
- |
Other |
7225.30 |
- |
Other, not further worked than hot-rolled, in coils |
7225.40 |
- |
Other, not further worked than hot-rolled, not in coils |
7225.50 |
- |
Other, not further worked than cold-rolled (cold-reduced) |
7225.9 |
- |
Other: |
7225.91 |
- |
- |
Electrolytically plated or coated with zinc |
7225.92 |
- |
- |
Otherwise plated or coated with zinc |
7225.99 |
- |
- |
Other |
|
|
|
|
72.26 |
Flat-rolled products of other alloy steel, of a width of less than
600 mm: |
7226.1 |
- |
Of silicon-electrical steel: |
7226.11 |
- |
- |
Grain-oriented |
7226.19 |
- |
- |
Other |
7226.20 |
- |
Of high speed steel |
7226.9 |
- |
Other: |
7226.91 |
- |
- |
Not further worked than hot-rolled |
7226.92 |
- |
- |
Not further worked than cold-rolled (cold reduced) |
7226.99 |
- |
- |
Other |
The general
and MERCOSUR rate of duty on all the steel commodities that are subject to
the safeguard duty of 12% (for the next year) is 10%, which means that
customs duty on goods imported from or originating in all countries except
the EU, EFTA and the SADC will be 22%. The rate of duty from the EU, EFTA
and SADC is free, and it will thus only be the 12% safeguard duty that will
apply from these countries.
The
safeguard duty will be reduced by 2% to 10% with effect from 11 August 2018
up to and including 10 August 2019, and by a further 2% to 8% on imports
with effect from 11 August 2019 up to and including 10 August 2020.
Please note
that many countries (including the BLNS Countries which are SACU Member
States are excluded from payment of the safeguard duty in terms of the
recommendation on Report 551.
Three
notices were published to implement the recommendation in Report 551, namely
Notices R. 829 to R. 831 which were published in Government Gazette
No. 41038 of 11 August 2017. |
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 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.
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).
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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.
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.
The International Trade Commission of South Africa (ITAC) also
publishes Sunset Review Applications in relation to anti-dumping
duty in terms of which any definitive anti-dumping duty will be
terminated on a date not later than five years from the date of
imposition, unless the International Trade Administration
Commission determines, in a review initiated before that date on
its own initiative or upon a duly substantiated request made by
or on behalf of the domestic industry, that the expiry of the
duty would likely lead to continuation or recurrence of dumping
and material injury.
There were no
notices regarding the applications to the amendment of the SACU
CET at time of publication. The last notices were published in
Government Gazette No. 40998 of 21 July 2017.
The Notice
numbers were Notice 546 of 2017 and Notice 547 of 2017.
Refer to the
Bulletin of 28 July 2017 for more information about these
Notices.
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