Presentation to the Portfolio Committee on Economic Development Workshop Presented by

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

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

3. 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. Instruments

4. Initiations

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

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

7. 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 2012. One investigation on frozen potato chips was initiated in 2013. 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. Historic use of instruments

8. 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. Dumping Dumping

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 21days 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 7+30+14 2 days Commission prelim. decision Publication of provisional payments Comments on verification reports Finalise prelim & submitagenda Prelim report ready for SM Prelim report approval by CC 2 days 7 days 10 days 18 days 2 days 10 days 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. 10 months for final measures. Provisional measures within 6 months of initiation. Duties stay in place for 5 years. Sunset Reviews. Time Frames

16. Comparative Time Frames

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

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

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

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

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

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

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

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