At the beginning of 2012, we specu- lated in this column on the number of trade protection investigations that might be initiated by the International Trade Administration Commission of South Africa (Itac) during the course of 2012. With 2012 now part of history, we can evaluate our predictions and again gaze into the crystal ball on what 2013 may hold.
During the course of 2012, the number of investigations initiated by Itac was as shown in the table
We are surprised at the drop in fresh antidumping investigations initiated during the past year, given government’s current protectionist mindset. We do not believe the drop in investigations is the result of industry thriving or government reversing its protectionist stance. Instead, this is due to the poor success rate of investigations initiated. Most unnerving of these was the antidumping investigation into chicken imported from Brazil. Itac was faced with both court action and a World Trade Organisation action and, in the face of this rather stiff opposition, simply allowed the matter to expire with no final duty being imposed before the legislated deadline.
The duty increase applications increased significantly and we believe this trend will continue into 2013. This is one of the strongest measures of protectionism and, looking at the composition of the new commission, I think we can safely predict a spike in protectionist actions initiated and measures imposed during 2013.
At the end of last year, we saw the first safeguard application being initiated since 2007, this time on imports of frozen potato chips. A safeguard is an extremely aggressive action to essentially curtail all import trade on the given product owing to serious injury to the domestic industry. The application is brought against imports from all countries and lacks the greater precision of an antidumping appli- cation. It is typically used as an emergency measure and is usually put in place for no more than three years. I think we will see at least three more safeguard applications initiated during 2013.
While the legal framework exists for counter- vailing actions, Trade and Industry Minister Rob Davies has been very clear that no countervailing actions will be brought against China. Although this is a political view and is by no means founded in law, Itac appears to be unofficially implementing this decision by Davies. Unless this is challenged in the courts, we can safely assume that we will go through another year of no countervailing actions against China regardless of the devastating impact imports of subsidised Chinese products have on the Southern African Customs Union industry and in spite of the rest of the world using this very important instrument in dealing with subsidised imports from China.
Finally, South African Revenue Service is still saying the new customs Bills will become legislation around June, but we cannot see how. The rules have still not been circulated for comment and the proposed changes in the last round were so significant that we cannot imagine how the legislation can be enacted without further comment. We predict that the earliest implementation of the new legislation will be the very end of 2013.