1. Presentation to the Portfolio Committee on Economic Development Workshop
Presented by
Carina van Vuuren
Date: 18 August 2015

2. Structure of Trade Remedies Unit
Trade Remedies I - Carina van Vuuren
Trade Remedies II – Zoleka Xabendlini
18 investigators and 2 administrators

3. Instruments
There are three trade remedies instruments:
Anti-dumping measures
Countervailing measures
Safeguard measures
The objectives of these measures are to enable fair trade in order to sustain domestic product, retain and create jobs and promote international competitiveness.

4. Initiations

5. WTO
SA member of WTO – bound by rules
3 WTO Agreements applicable
Anti-dumping
Countervailing
Safeguards

6. Domestic Law
ITA Act
3 Regulations
Anti-dumping
Countervailing
Safeguards
Administrative Justice Act
Access to Information Act

7. Historic use of instruments
In the years 1995 to 2011, the Commission initiated only 13 countervailing investigations, in comparison to the 216 anti-dumping investigations initiated and in the years 2007 to 2011, the Commission initiated only two countervailing investigations. Since 2012, more interest has been shown in the countervailing instrument and four new applications have been received from industry. Although only one safeguard investigation on lysine has been conducted since the existence of ITAC, a lot more interest has been shown in this instrument since One investigation on frozen potato chips was initiated in Three, on chicory, graphite electrodes and olive oil, were declined. With regard to AD, in contrast to the decreasing tend up to 2011, an increased number of applications have been received since 2012 Seven new trade remedy investigations were initiated in 2012/2013 whereas in 2013/14, it was four.
Of the three instruments, anti-dumping is the most frequently invoked, both globally and in South Africa.

8. Dumping
Dumping
Dumping: Selling goods at a lower price in the export than the domestic market.
Firms engage in geographical price discrimination to maximise profits.
The problem arises when dumping threatens and/or causes injury to domestic manufacturers .
Since Dumping is regarded as an unfair trade practice the WTO AD Agreement sets out the rules for acting against dumping that causes injury.
South Africa is an old and active user of the instrument with the first law on AD having been enacted in 1914.

9. Allegation of Dumping :
What to Prove
Dumping
Material injury/threat
Causality

10. Calculation of dumping margin:
Normal value (after adjustments)
Less
Export price (after adjustments)
As % of export price

11. Material injury
Information provided by industry.
14 Injury factors considered by the Commission.
Price vs Volume injury.
Trend analysis.

12. Material injury Actual and potential decline in sales Profits Output
Market share
Productivity
Return on investment
Utilization of capacity

13. Material injury
8. Factors affecting domestic prices
9. Magnitude of margin of dumping
10. Inventories
11. Employment
12. Wages
13. Growth
14. Ability to raise capital

14. Anti-dumping Investigation procedure and time frames
21 days
Properly documented application
Applicant verification prep
Merit submission prep
SM approval & place on agenda
Merit decision
Implementation of decision
Notification out on Monday
18 days
10 days
7 days
7 days
21 days
Sending exporters’ verification reports
Verification of exporters
Verification plan for importers & exporters & verification of importers
Responses on deficiencies
Identify deficiencies and send letter
Exporter/ importer responses
14 days
14 days
14 days
12 days
2 days
Commission prelim. decision
Publication of provisional payments
Comments on verification reports
Finalise prelim & submit agenda
Prelim report ready for SM
Prelim report approval by CC
2 days
7 days
10 days
18 days
2 days
10 days
Important notes:
The investigation procedure described below is applicable to all anti-dumping investigations. It should however, be noted that complexities differ from one investigation to another. The timeframes indicated therefore are based on assumptions of one exporting country named in the application, two responding importers, two exporters, homogenous product, one oral hearing and a proficient ITAC investigator.
SARS officially takes 6 weeks to publish notices but we only estimated 21 days, which they sometimes take.
Final decision
Final submission on agenda
Provision for an oral hearing
Comments on prelim. report
Sending out prelim. report & notice
Essential facts letters
18 days
2 days
21 days
18 days
21 days
Total days: 274 (9 months)
Total days: 309 (10 months)
Comn. final decision after essential facts
Final report approval by Chief Comm.
Approval by Minister
SARS publication
Comments on essential facts
Final submission after essential facts
21 days
3 days
10 days
14 days
7 days
18 days

15. Time Frames
10 months for final measures.
Provisional measures within 6 months of initiation.
Duties stay in place for 5 years.
Sunset Reviews.

16. Comparative Time Frames
South Africa US
European Union
Canada
India
Australia
Preliminary determination timeframe
177 days
140 days
270 days
90 days
150 days
Final determination timeframe
309 days
370 days
450 days
210 days
300 days
215 days

17. Countervailing
Countervailing is action against imported products which are subsidised by a foreign government which causes injury to the SACU industry

18. Allegation of Subsidisation :
What to Prove
Subsidy
Material injury/threat
Causality

19. Process and Time Frames For Imposition
Complaint, Merit assessment, Prelim determination, Final determination and recommendation
Consultations
10 months for final measures
Provisional measures within 6 months of initiation

20. Safeguards
Safeguard action is taken to protect the SACU industry against a surge of imports which causes serious injury

21. Safeguard Action : What to prove
Unforeseen developments
Surge of imports
Serious injury/threat
Causality

22. Difference w.r.t. other 2 instruments
Not action against unfair trade
Against ALL countries
Adjustment plan needed from industry
Consultations with Members
Public interest considerations

23. Process and Time Frames For Imposition
Complaint, Merit assessment, Prelim determination, Final determination and recommendation
All steps notified to WTO
Consultations with all members
10 months for final measures

24. Duration of Measures
4 years – ext to 6 years
Liberalization
Half way review if longer than 3 years
Compensation

25. Investigations completed
1 April 2014 to 31 March 2015
Frozen Potato chips – Safeguard Investigation
Soda Ash – Anti-Dumping Investigation
Frozen Potato Chips – Anti-Dumping Investigation
Frozen Chicken Portions – Anti-Dumping
Welded Chain Link – Anti-Dumping Sunset Review
Gypsum Plasterboard – Anti-Dumping Sunset Review
Wire Ropes and Cables – Anti-Dumping Sunset Review
Tall Oil Fatty Acid – Anti-Dumping Sunset Review

26. Investigations on-going as on
31 March 2015
Wheelbarrows – Anti-Dumping Investigation
Cement- Anti-Dumping Investigation
Stainless Steel Sinks – Anti-Dumping Sunset Review
Garlic – Anti-Dumping Sunset Review
Flat/float Glass – Anti-Dumping Sunset Review

27. Judicial Reviews/Disputes
Not a new phenomenon
50% of all disputes in WTO
Contentious issue
Small % of total investigations

28. END