ITAC Recommends that Patel Impose Significant Duties on China and India

ITAC Recommends that Patel Impose Significant Duties on China and India

On 25 April 2023, the International Trade Administration Centre (ITAC) publicly released its full report and accompanying recommendations regarding the “Investigation into the alleged dumping of spades and shovels originating in or imported from China and India and picks, rakes and forks from India: Final Determination” in relation to an investigation that commenced in 2021. The investigation followed the Commission’s finding that there was prima facie evidence of dumping of the relevant products from China and India, which threatened to cause and caused material injury to the South African Customs Union (SACU) industry. ITAC recommended that the Minister of Trade, Industry and Competition (Patel) impose definitive and substantial anti-dumping duties on imports of the relevant products from China and India.

Following the BRICS Economic Indaba recently hosted by South Africa, Patel has been left with the unenviable decision of whether or not to impose significant duties on global trading powerhouses and South Africa’s fellow BRICS partners, India and China, while trade fragments, tensions rise and economies try to recover. The ITAC recommendations followed the Commission’s finding of harmful dumping conduct into the SACU region, after complaints were lodged by local businesses. The businesses’ complaints and Commission’s preliminary findings resulted in two noteworthy investigations by ITAC, concerning the importation of laminated glass, shovels and spades from China, and picks, forks and rakes from India.

Upon initiating an investigation, ITAC sends the relevant diplomatic representatives and known producers/exporters of the subject’s products non-confidential versions of the application, together with an initiation notice and questionnaires regarding foreign producers/exporters, to complete. It also provides such documents to the known SACU region importers of the subject’s products, for completion. Once the relevant parties have considered all responses and comments from interested parties, the Commission makes a preliminary determination. Should the preliminary determination be that the SACU industry is experiencing material injury and the material injury/threat of material injury is the result of the alleged dumped imports into the region, the Commission may make a number of recommendations, including that the Commissioner of the South African Revenue Services (SARS) imposes provisional payments on imports of the subject’s products for a period not exceeding six months, to protect the local industry.

In its recent inquiry into the importation of spades and shovels, for example, the Commission requested just this of the Commissioner of SARS. The Commissioner accordingly imposed provisional payments on the subjects as of May 2022 until November 2022. Thereafter, the Commission made a final determination premised on the “essential facts”, which had been commented on by interested parties, recommending to Patel that definitive anti-dumping duties be imposed on the imports of the subject product emanating in or imported from China and India.

In addition to the inquiries into shovels, spades and laminated glass, businesses in the mineral, plastic, chemical, textile and electrical equipment industries can expect to be involved in ensuing investigations. While the recommended duties could place heavy burdens on local industries if general or blanket duties were to be imposed, the Commission and ITAC’s strict delineation of relevant product categories indicates a welcome approach by the authorities, relieving industry stakeholders of concerns that ITAC intends to impose general duties on industries as a standard practice.

In a separate investigation which was heard by the High Court of South Africa, in relation to which ITAC published a media release on 2 May 2023, the complainant (namely Tata Chemicals South Africa (Pty) Ltd) failed to actively participate in the sunset review investigation conducted by ITAC, although it had participated in the initial investigation of the matter, which pertained to the imposition of anti-dumping duties of 40% on specific imports by Tata from the United States. It is noteworthy in this regard that the High Court made specific mention of the fact that the anti-dumping regulations specifically provide that ITAC may rely on other facts available to it in making its final decision if a foreign producer fails to cooperate in an investigation by providing the requested information.

Lastly, the High Court also upheld the interpretation adopted by ITAC concerning the anti-dumping regulations, and in particular the issue of whether ITAC may increase the anti-dumping duties to be charged in a sunset review investigation, and during what stage ITAC needed to commence such an investigation.

View more of ITAC’s recent releases here.

Nicola Taljaard

About Nicola Taljaard

Associate Designate at Primerio - LLB and LLM International Trade Law (cum laude) graduate from Stellenbosch University, focusing on areas of International Commercial Sales Law, Sustainable Development and Social Justice, International Law of Tax and Legal Aspects of World and Regional Trade. Nicola is currently employed as a candidate attorney at Primerio International, a pan-African law firm specialising in competition, trade and corporate law.

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