Tariff protection application by SA firms on the rise

TARIFF protection applications by local companies have increased significantly in the last eight years, signifying the extent of pressure faced from cheap imports, particularly from China.

Barely a week ago, steel maker Evraz Highveld Steel was granted leave for temporary closure after it cited financial constraints and cheap imports of steel from China as main pressure points threatening viability and 1 089 jobs.

Indications from the International Trade Administration Commission (Itac) showed that while there were no tariff determinations in 2008, the number of decisions made so far this year was nine with more outstanding.

Itac has reduced timeframes for tariff amendment applications from 12 months to six months for normal applications and four months for sectors in distress.

It indicated, at the height of the global financial crises in 2008, it had made a total of 39 determinations over the past seven years.

The bulk of determinations in the 2014 year were in the steel and construction industry where it ruled on 10 percent to 20 percent ad valorem tariffs in the Polytetrafluoroethylene Tape sector, from 5 percent to 15 percent ad valorem for wire and pointed screw nails; and from free of duty to 10 percent ad valorem for graphite electrodes, certain screws, bolts and nuts.

Itac has been called upon recently in the dramatic battle between local poultry producers pitted against importers over chicken imports from Brazil.

It determined 27 percent to 82 percent ad valorem for whole bird imports, 5 percent to 12 percent ad valorem on boneless cuts, from 18 percent (220c/kg) to 37 percent ad valorem for bone-in portions, from 27 percent to 30 percent ad valorem in offal and 27 percent to 31 percent ad valorem for carcasses.

Sectorally, applications have increased for products including lawnmower blades; alkyd resins; textile interlayered or otherwise combined with bentonite geo-synthetic clay liners; outdoor television antennas; laminated safety glass; uncooked pasta; not stuffed or otherwise prepared; conical steel drums; mussels; decoders; as well as taps and mixers.

Applications with pending determinations comprise of polyurethane pre-polymers, zinc coated, alu-zinc coated and painted flat steel, aluminium rolled products, aluminium extrusions, large bore steel pipes, ceramic sanitaryware and acrylic sanitaryware.

WTO

The applications are from Sacca, represented by ArcelorMittal SA and Safal Steel, Hulamin Operations, Hulamin Extrusions, Hall Longmore, Vaal Sanitaryware, Libra Bathrooms and National Urethane Industries among others.

Itac’s manager of communications Foster Mohale said the level of protection was informed by the price disadvantage experienced against foreign competition, as well as the World Trade Organisation bound rate beyond which the duties could not be increased.