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ITAC STRATEGIC PLAN BRIEFING TO THE PORTFOLIO
COMMITTEE ON ECONOMIC DEVELOPMENT
27 March 2013
Siyabulela Tsengiwe
Chief Commissioner
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Contents
1. Mandate.
2. Key Strategic Objectives, Performance Areas & Services.
3. Situational Analysis and Implications for ITAC.
4. Achievements.
4.1 Investigations.
4.2 APDP and MIDP.
4.3 Judicial Reviews.
5. Challenges
5.1 Procedure and time frames.
5.2 Impact Assessments.
5.3 Organisational Development.
6. Trade Remedies
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• 21 days
ITAC’s Mandate, Vision, Mission,
and Key Strategic Objectives
Vis
ion
M
iss
ion
S
tra
teg
ic O
bje
cti
ve
s
An institution of excellence in international trade administration, enhancing economic growth and
development.
ITAC aims to create an enabling environment for fair trade through: efficient and effective administration
of its trade instruments; and technical advice to the Economic Development Department and thedti.
Ensure appropriate contribution to employment creating growth and development through provision of its
international trade instruments.
Ensure strategic alignment and continued relevance within the Economic Development Department and
national agenda.
Ensure organisational efficiency and effectiveness through business support services.
Ma
nd
ate
The aim of ITAC, as stated in the Act, is to foster economic growth and development in order to raise
incomes and promote investment and employment in South Africa and within the Common Customs
Union Area by establishing an efficient and effective system for the administration of international trade
subject to this Act and the SACU Agreement.
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• 21 days
Key Strategic Objectives,
Performance Areas & Services
Ensure contribution to
employment creating growth
and development through
effective delivery of
international trade instruments
International Trade Instruments
What will be pivotal in improving
the provision of customs tariffs,
trade remedies, and import and
export control will be the quality
and turnaround times.
Customs Tariff Investigations [Increasing Duties, Reducing Duties, &
Creation of Rebates]
Trade Remedies Investigations [Antidumping, Countervailing & Safequards]
Import & Export Control [Permits & Enforcement]
Ensure organisational efficiency
and effectiveness of ITAC
Business Support Services
oHuman Resources
oFinance
oInformation Technology
oLegal Services
oPolicy and Research
Ensure strategic alignment and
continued relevance with the
Department of Economic
Development and national
agenda
International Trade Technical
Advice
ITAC will become more proactive
in the provision of technical inputs
and contributions to trade and
industrial policy implementation,
as well as trade negotiations at
bilateral, regional and multilateral
levels.
Technical Inputs on Trade and
Industrial Policy including Sector
Strategies
Technical Inputs on Trade
Agreements
[WTO, SADC & SACU] ;
Bilateral Agreements
[EU, EFTA, MERCOSUR, & INDIA]
The performance of the institution will
be driven through appropriate business
solutions, efficient and effective
utilisation of material, human and
information technology resources.
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Global and domestic environment
• South Africa is a globally integrated economy.
• The Eurozone crisis with a major part of the European Union in
recession.
• Economic recovery remains sluggish in the US.
• Emerging economies in particular China and India continue to lead
global growth.
• Global economic growth is estimated to increase marginally from 3.2%
in 2012 to 3.5% in 2013.
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Global and domestic environment
• South Africa’s economic growth rate was 2.5% in 2012 and is expected
to grow at 2.7% in 2013.
• SA’s trade performance remains a huge challenge. Exports grew by
just 1.1% while imports grew by 7.2%.
• Manufacturing is slowly recovering save for the increasing cost
pressures and cheap imports.
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ITAC Response and industry
• Alignment of the instruments to government policy.
• Revised time frames 12-10 months (trade remedies) and on Tariff
investigations 12-6 months.
• Quality: Procedure and substantive issues.
• Compliance with the law.
• Steady rise in the use of trade remedies.
• Considerable rise in tariff increases.
• Export control in support of local beneficiation.
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The continent and regional integration
• Africa has a market of over 1 billion and is growing fast.
• Africa accounts for 18% of our total exports.
• Tripartite Free Trade Area.
• SADC consolidation.
• SACU.
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Tariff Investigations 2012\2013
APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT
Kaymac Geo-synthetic clay liners Free – 25% Increase
Uniresins (Pty) Ltd Alkyd resins Free – 15% Increase
Blue Ocean Mussels Mussels Free & 5.5c/kg – 25% Increase
Pioneer Foods (Pty) Ltd Uncooked pasta, not stuffed or
otherwise prepared
30% - 40% Increase
ITAC Salmon & Trout Remain at 25% Increase
Foodcorp (Pty) Ltd Sardines in airtight containers Declined Increase
Grain SA Dollar based reference price - wheat In process Increase
Collier Tool & Die CC Lawn mower blades Free – 20% Increase
Ellies Holdings (Pty) Ltd Outdoor Aerials Free – 20% Increase
Peninsula Drums CC Conical drums Free - 15% Increase
ITAC Set top boxes Free - 15% Increase
Shatterprufe , USG Autoglass CC, FGW
Safety Glass (Pty) Ltd & National Auto Glass
(Pty) Ltd
Laminated automotive windscreens 15% - 30% Increase
Cobra Watertech (Pty) Ltd Taps and Mixers In process Increase
RIC Manufacturing CC PTFE tape In process Increase
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Tariff Investigations 2012\2013
APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT
Jensen Belts Buckles, magnetic locks & studs for belts Declined Rebate
Paciwave (Pty) Ltd Fabric for bulk containers Declined Rebate
Bagshaw Footwear Leather for protective footwear Declined Rebate
Nyathi Textiles Fabric for impregnation or coating Declined Rebate
ITAC Worn overcoats Approved quota Rebate
Kiran Global Caustic Soda for Meta-silicates In process Rebate
Bidvest Paper Plus (Pty) Ltd Mechanisms for lever arch files Approved Rebate
Department of Trade and Industry Rebate for Automotive Production and
Development Programme – Rebate 317.03
Approved
Rebate
GRW Engineering (Pty) Ltd) Certain parts for refrigerated trailers Declined Rebate
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Tariff Investigations Continued
APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT
Colas (Pty) Ltd Petroleum Bitumen Approved Rebate
ITAC Rebate 470.01 & 470.03 Approved merging rebates Rebate
ITAC Worn clothing for wiping rags Approved tightening of Guidelines Rebate
ITAC Rebate for Set Top Boxes to exclude populated PC
Boards and other designated inputs
Approved Rebate
ITAC Tyres for organised motor sport & agricultural/
forestry vehicles & machines
Approved Rebate
Department of Trade and
Industry
Temporary deeming of imported aluminium/ steel
for the manufacture of wheels
Approved Rebate
ITAC Extension of the claiming period for Productive
Asset Allowance programme to 2015.
Approved Rebate
EDD SKD manufacturing for Minibuses and Midi buses
Approved Rebate
ITAC Claiming under the Productive Asset Allowance by
component manufacturers, whereby the OEM
transferred its project to participate under the
Automotive Investment Scheme
Approved Rebate
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Tariff Investigations Continued
APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT
SABAC (Pty) Ltd Brake fluid Approved
10% - free
Reduction
Giants Canning (Pty) Ltd White Pea beans Declined Reduction
General Mills Frosting Declined Reduction
Hudaco Trading (Pty) Ltd AC generators and alternators Approved
5% & 10% - free
Reduction
Massmart Camp Chairs Declined Reduction
Divfood – subsidiary of Nampak Aluminium slugs Declined Reduction
Capco CC Mineral fibre ceiling tiles Declined Reduction
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Trade Remedies Investigations
Product Country Applicant Type Status and Duties
Frozen chicken and parts Brazil Southern African Poultry
Association
Anti-dumping Finalised. No duty.
Frit Brazil
Ferro Industrial Products (Pty) Ltd
Anti dumping
Finalised. 24,65% -Smalticeram Do Brasil
50% - others.
Threaded rods PRC South African Fasteners
Manufactures’ Association
Anti-dumping Finalised. No duty.
Threaded screws PRC South African Fasteners
Manufactures’ Association
Anti-dumping
Finalised. Duties.
Coated Paper PRC, Korea Sappi Fine Paper Anti-dumping In progress – preliminary phase.
Unframed Mirrors PRC PFG Glass Anti dumping In progress – preliminary duties imposed.
ORIGINAL ANTI-DUMPING INVESTIGATIONS
ANTI-DUMPING REVIEWS
Product Country Applicant Type Status and Duties
PVC Rigid PRC, Chinese
Taipei
Arengo Sunset Review In progress – final phase.
Acetaminophenol PRC Anqui Lu’an Pharmaceutical Co
Ltd
New Shipper Review Finalised. No duty.
Hand Tools PRC Lasher Tools Sunset Review In progress – final phase.
Product Country Applicant Status and Duties
Frozen Potato Chips
(French Fries)
All McCain (Pty) Ltd In progress – preliminary phase.
SAFEGUARD INVESTIGATIONS
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APDP and MIDP
• The Automotive Production and Development Programme
regulations, rebate and guidelines have been finalised for
implementation this year. With the introduction of the Automotive
Production and Development Programme, the Motor Industry
Development Programme will be phased out.
• The Automotive Production and Development Programme replaces
the Motor Industry Development Programme and the objective is to
create an enabling environment for the domestic industry to
significantly grow production volumes and local value addition,
leading to the creation of additional employment opportunities
across the value chain.
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Judicial Reviews
• Different and opposing interest in the value chain.
• WTO Dispute Settlement Mechanism.
• Litigation in other Jurisdictions.
• 2008 – 2012 Court Cases.
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Procedure for conducting Tariff Investigations
Government
Gazette
Notice
Final
Submission
Exco-Sub
Committee
Commission’s
Final
Determination
Reports &
Submission 40 5 15 15
Minister of
Trade and
Industry
Deputy
Minister of
Finance
Publication
Notice by
SARS
Receipt of
Application
Properly
Documented
Application
Preliminary
Submission
Exco-Sub
Committee
Commission’s
Preliminary
Determination 19 14 5 15 10
10
148 Days = 6 Months
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21 days
Properly
documented
application
Applicant
verification
prep
Merit
submission
prep
21
Merit
decision
SM approval
& place on
agenda
7
Verification
of exporters 12 7+30
+14 2
2 Comments on
prelim. report 21
2 18 10 7 2 Prelim report
ready for SM
Commission
prelim.
decision
Provision for an
oral hearing
10
SARS
publication
18 18
14 10 18 7 3
21
Total days: 274 (9 months)
Total days: 309 (10 months)
7 21 18 10
14 Sending exporters’
verification reports 14 14
Verification plan for
importers & exporters
& verification of
importers
Identify
deficiencies and
send letter
Exporter/
importer
responses
Comments on
verification reports
Prelim report
approval by CC
Final
submission on
agenda
Sending out
prelim. report &
notice
Implementation
of decision
Notification
initiation of
investigation
Responses on
deficiencies
Finalise prelim
& submit agenda
Publication of
provisional
payments
Essential
facts letters
Final
decision
Approval by
Minister
Final report
approval by
Chief Comm.
Comn. final
decision after
essential facts
Final submission
after essential facts
Comments on
essential facts
Procedure for conducting AD Investigations
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Impact Assessments
• ITAC has begun with assessing the impact of its instruments at a
sectoral level.
• Tariff support is now conditional to reciprocal commitments by
beneficiaries against policy objectives of production, investment and
employment. The monitoring is done annually and in 3 year reviews.
• Getting cooperation from firms to supply the necessary data is a
challenge that ITAC is grappling with.
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Organisational Development
• The work of ITAC is increasingly demanding and expanding and
therefore the need for organisational development has become a priority.
• The tough global economic conditions and increasing cost pressures for
domestic producers have led to increased demand for ITAC instruments.
• Time frames for investigations have been shortened whilst ensuring that
quality is not compromised.
• The introduction of the APDP and the initiation of tight export controls
using a price preference system on scrap metal.
• Trade monitoring and evaluation, including impact assessments.
• There is a pressing need to boost human resource capacity and in this
regard ITAC is working closely and in cooperation with EDD on its
organisational development.
• The staff compliment of ITAC is 131 with 100 positions in the core
business and 31 positions in support services.
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Trade Remedies
• Objectives: Enable fair trade in order to sustain domestic production,
retain and create jobs and promote international competitiveness.
• Anti-dumping measures are taken against injurious dumped imports.
Dumping is used to refer to a situation where goods are sold to a
foreign market at prices less than the country of origin.
• Countervailing measures are used against subsidised imports that
threaten and/or cause injury (i.e. decrease in prices; loss of market
share; decrease in profits; decrease in sales volumes; job losses etc.)
to the domestic manufacturer.
• Safeguards are actions against trade that may be regarded as fair but
overwhelms domestic producers. Safeguards are used against an
unforeseen surge of imports that threatens and/or causes injury to the
domestic producers.
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Dumping & Anti-dumping (AD) Actions
• 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 (Decline: Prices; Sales Volumes; Profits;
Market shares; Job losses etc.)
• 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.
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Turnaround times
South Africa US EU Canada India Brazil Australia
10 Months 9 Months 14 Months 7 Months 12 Months 12 Months 5 Months
Comparison with other Jurisdictions
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SA’s use of Anti-dumping
• Since the founding of the WTO in 1995 to 2010, the top users of the anti-dumping instrument have been, in terms of the
number of investigations initiated –
0
10
20
30
40
50
60
70
80
90
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
European Union
United States
Australia
Argentina
India
South Africa
India: 613 United States: 442;
European Union: 414; Argentina: 277; and
South Africa: 222; Australia: 212.
Anti-dumping investigation initiations by reporting member 1995 – 2010
Source: WTO data files and ITAC
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Thank You
Office Contact Details:
012 394 3713
Cell: 082 454 8979
www.itac.org.za