13 July 2020
Minister Ebrahim Patel
Minister of Trade, Industry and Competition
Dear Honourable Minister
STEEL DOWNSTREAM CANNOT AFFORD FURTHER STEEL DUTIES
According to our knowledge, ITAC will or has already made a recommendation to yourself whether to implement duties on nine new tariff codes relating to coated products. ITAC has informed us that the process is already in an advanced stage and that they are not in a position to communicate with us any further.
The above-mentioned process must be viewed against the background of the Steel Master Plan initiative announced by yourself earlier this year. It was our understanding that the subject of duties was to form an integral part of such a comprehensive Master Plan for the Steel Industry.
We also wish to focus your attention on the fact that a previous, and again a recent survey conducted by NEASA, indicated that more than 95% of steel companies support the view that all duties should be scrapped.
It is also important to note that NEASA is in possession of written confirmation from ITAC, that the existing duties will be reviewed since the three year period has expired, and submissions were made to the effect that the conditions attached to the current duties were not met. Consequently, when ITAC, instead of proceeding with the review, issued three new notices and/or requests that will result in more duties, instead of proceeding with the review, it was met with surprise and resulted in great anxiety among role players in the steel downstream.
A large portion of these products affected by the duties are exported and the rebate-system is unworkable since these products often change hands as the various manufacturers add value to the end-product.
Minister, many jobs have been lost since the introduction of the duties that impaired the competitiveness of the steel downstream. The condition of the downstream, where the real employment potential lies, is already dire and any further duty-pressure will simply break the proverbial camel’s back of many of the downstream companies.
It is in light of the above that we request that you do not accede to any proposal which will further burden the steel downstream, at least until the Steel Master Plan is finalised.