Calling a spade

An alternative headline I had for this week’s instalment of this column was ‘Wing it’ but I decided against it, as I am perilously close to exceeding my yearly quota on that topic. What choice, and why the choice, you might wonder. The response to the last question first – well, blame it on the Government Gazettes of April 17 and 19. As for the first, you need to wait a bit longer. Life is so unfair, I know.

Speaking of unfairness, do you know how many unfair trade remedy duties are currently being implemented by the Southern African Customs Union (Sacu)? In other words, how many anti-dumping duties are in force, since there are no countervailing duties, also known as anti-subsidy duties? The answer is 73. How many of these rates of duty are specific? A specific duty is not related to the value of the imported goods; it is imposed on the quantity imported. There are 22, or 30.14%. The two obvious follow-up questions to the respective answers are why are there no anti- subsidy duties, and why are not all the duties ad valorem; in other words, based on the value of the goods.

You could have asked a separate question on fair trade remedy duties, also known as safeguard duties, and this is about how many there are; the answer is nine. If you were really inquisitive, you would have asked whether the goods on which the safeguard duties were imposed also had anti-dumping duties imposed on them, and the answer to this would have been only one – a hint; give your thoughts some flight. It is indeed the gallus domesticus variety – chicken to you and me. The remaining eight are for flat-rolled iron and steel products.

As for chicken products, on April 17, the International Trade Administration Commission of South Africa (Itac) announced that it had recommended to Trade, Industry and Competition Minister Ebrahim Patel that the current anti-dumping duties on frozen bone-in chicken portions originating in or imported from the US be maintained at 940c/kg. The Minister subsequently accepted Itac’s recommendation.

Let me offer a few objective observations, which might trigger a few more questions. There are 14 anti-dumping duties, or 19.18% for chicken. Seven of these duties are imposed against Germany, the Netherlands and the UK, and seven against the US. All the duties against the US are specific, and those against the European countries are ad valorem. Why, do you think, is that the case?

The US duties are all country specific, while those against European countries are company specific. In case you were wondering, the chicken safeguard duty is against the EU, and the first time anti-dumping duties were imposed against the US was a quarter of a century ago.

If you want to get out the candles to celebrate that anniversary, you might want to grab a few more. On April 19, Itac extended an invitation to comment on its ‘sunset review’ of the anti-dumping duties on garden picks, spades, shovels, rakes and forks originating in or imported from China. The comment submission deadline is May 20.

The anti-dumping duties on Chinese garden implements predate the new South Africa, having been imposed in 1993, meaning they have been in force for the past 31 years, which makes them the oldest dumping duties on the books. The primary fault of the World Trade Organisation Anti-Dumping Agreement is that anti-dumping duties can remain in place forever.

So, for 31 years, Lasher Tools, “the major producer in the Sacu industry”, has been protected against dumping, or, rather, the threat thereof, and, according to an article in the National Employers Association of South Africa’s newsletter published on April 2 and titled ‘The Demise of the Steel Industry Accelerated’, this protection is not expected to end anytime soon. Lasher Tools’ latest application is supported by MacCorkindale Investments and Ottimo Products, resulting in it being regarded as “made by or on behalf” of the Sacu industry”.

Another obvious question is: For how long can South Africa’s downstream industries survive when South Africa’s primary product producing industries are failing, fast?