STEEL CAPTURE – a lost cause?
Regardless of all our attempts to convince Government otherwise, they went ahead and introduced the initial 10 percent customs duties in September 2015 and the 12 percent safeguard duties in July 2017 this year.
They have done so notwithstanding AMSA’s poor record in terms of on-time delivery, AMSA’s sub-standard steel in many instances and even the fact that AMSA, in respect of high quality steel, is not being able to supply the downstream – at all.
The ability of the downstream to adapt, in the face of these adverse duties, is typical of the resolve shown by entrepreneurs to find alternative ways when doors are simply shut in their faces. It is this tenacity that is keeping the wheels of manufacturing in South Africa rolling. However, finding alternatives entails processes which lead to job losses. One of the alternatives, which is indeed currently pursued by business, is moving their South African operations to neighbouring countries. That, of course, has a direct impact on jobs.
The safeguard duties recently introduced followed ITAC’s 180 degree turnabout from their initial finding that the duties ‘were not in public interest’, to a finding of the safeguards ‘being in public interest’, without any changes of the underlying facts and without due process being followed.
At the time of the introduction of the initial customs duties in 2015, Government set certain conditions which AMSA had to meet, failing which the customs duties would have been reviewed. The following is a table of the conditions set by the Minister, and AMSA’s performance in respect of each of these conditions:
Instead of scrapping the duties as a result of these defaults, the Department of Trade and Industry responded with additional duties – this time in the form of safeguard duties.
This whole “scheme” is totally intolerable – it flies in the face of sound reasoning.
Therefore, our campaign against these Steel Downstream hostile duties will continue.
As part of taking the matter forward, ITAC has again been reminded that they still need to respond by explaining why:
the decision to implement safeguard duties was taken on the basis of ‘it being in the public interest’, especially where it was originally proclaimed to be ‘not in the public interest’;
the World Trade Organization rules were not followed by denying industry an opportunity to respond before the above-mentioned change was implemented; and
the initial 10 percent duties, which were implemented, were not taken on review after the defaults listed above.
Click here to view the reminder to ITAC.