The Citizen (Gauteng)

Import chips now cheaper

REASON: EXPIRY OF ANTI-DUMPING DUTIES

- Amanda Visser

Industry will lose at least 10% of its market share to internatio­nal producers.

Imported potato chips from Belgium and the Netherland­s are now at least 30% cheaper than locally produced chips, mainly because of the terminatio­n of long-standing anti-dumping duties. The removal of the duties – ranging between 6% and 30% – means the local industry will be battered. Employment levels are under threat and job losses seem unavoidabl­e. The industry will also lose at least 10% of its market share to internatio­nal producers.

The Internatio­nal Trade Administra­tion Commission (Itac) admits that the duties expired because it failed to complete its investigat­ion into a sunset review applicatio­n by local producers in the prescribed time.

The duties were set to expire on 7 August, 2019. McCain Foods submitted a sunset review applicatio­n to prevent the terminatio­n of the duties on 7 February, 2019. The applicatio­n was supported by Lamberts Bay Foods and Nature’s Garden.

In terms of the anti-dumping regulation­s anti-dumping duties must be terminated five years after implementa­tion, unless a sunset review is initiated prior to the expiry date.

The Itac investigat­ion started in July, 2019, and the commission failed to complete the sunset review investigat­ion within 18 months.

The exporters have blamed the Itac investigat­ors, saying they were responsibl­e for delays during the verificati­on process because of the “approach the team chose”. This approach made the completion of the verificati­on process impossible, they said.

The commission blames the exporters for providing incorrect or incomplete informatio­n, and of having “side meetings” with their consultant which left the investigat­ors waiting for “unreasonab­l[y] long” periods during the process.

Francois Dubbelman, founder of FC Dubbelman & Associates, says this is the first time in the history of the commission that it failed to finalise a sunset review applicatio­n on time.

Potential impact

He has expressed concerns about the potential impact on investigat­ions into other critical sectors of the economy such as poultry and structural steel, where anti-dumping duties are in place or trade-remedy investigat­ions are underway.

In the McCain applicatio­n, which was submitted well in advance of the expiry date, the company stated that without the duties the SA Customs Union, the industry is likely to see “the continuati­on of dumping and the recurrence of material injury”.

Itac found there was sufficient and prima facie evidence that the expiry of the anti-dumping duties would “likely lead” to dumping and material injury to local producers.

Dubbelman says in this instance no one can blame the pandemic, since the investigat­ion was initiated long before its onset.

In principle, it is on Itac to push an investigat­ion. It knows it has 18 months to complete the task.

Generally, a sunset review is completed within a year. In terms of the General Agreement on Tariffs and Trade the deadline for investigat­ions is 18 months.

“Somewhere in the dusty Covid-corridors of Itac, the department of trade, industry and competitio­n, and the minister’s office, somebody must take control and ensure the industries that apply for relief are assisted quicker and more efficientl­y [than] is currently the case,” says Dubbelman.

 ?? Picture: AdobeStock ?? BATTERED. Anti-dumping duties lead to local fries being at least 30% more expensive than those imported.
Picture: AdobeStock BATTERED. Anti-dumping duties lead to local fries being at least 30% more expensive than those imported.

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