On 27 December 2024, the International Trade Administration Commission of South Africa (ITAC) extended an invitation for comment on its initiation of a safeguard investigation against the increased imports of flat-rolled products of iron or non-alloy steel of a width of 600 mm or more, clad, plated or coated, with aluminium-zinc alloys, of a thickness of less than 0.45mm, classifiable under tariff subheadings 7210.61.20 and 7210.61.30 and flat-rolled products of other alloy steel, of a width of 600 mm or more, otherwise plated or coated with zinc, of a thickness of less than 0.45mm, classifiable under tariff subheadings 7225.92.25 and 7225.92.35 (commonly known as ‘corrosion resistant steel coils’). Comment is due by 25 February 2025.
Based on the information submitted, ITAC has decided that ArcelorMittal South Africa Limited (MSA) submitted prima facie evidence to indicate that the events cited can be regarded as unforeseen developments and these unforeseen developments and the effect of the obligations incurred under the General Agreement on Tariff and Trade 1994 (GATT 1994) led to the increased volume of imports in absolute and relative terms; the surge in the volume of imports is recent, sharp, significant, and sudden enough that the Southern African Customs Union (SACU) industry is experiencing serious injury, and this is causally linked to the surge in imports.
MSA
The application was brought by MSA, the major producer of corrosion-resistant steel coils in SACU, which SAFAL supported.
A non-confidential version of the application is available for inspection at the ITAC’s offices.
Unforeseen Developments
The MSA stated that a confluence of events forms the basis of the unforeseen development that supports this application, which is, ultimately, the considerable oversupply of steel and, consequently, the oversupply of corrosion-resistant steel coil products in the world today, causing a surge in the volume of imports of corrosion-resistant steel coils into the SACU.
The MSA stated that during the Uruguay Round negotiations from 1986 to 1994, South Africa did not foresee the following events:
- The decision to split corrosion-resistant steel coils into two (2) main Harmonized System (HS) categories, namely non-alloy steel (HS7208) and alloy steel (HS7225), resulting in a tug and pull effect, whereby the increase in duties payable on one tariff sub-heading leads to a direct increase in the import volumes for the other due to their interchangeability in function; and
- The considerable oversupply of corrosion-resistant steel coils in the world today causing a surge in imports into the SACU, which the MSA broke down into four (4) main issues, namely:
- Studies show that the People’s Republic of China (China) did not become a fully fledged market economy as it assured World Trade Organization (WTO) Members it would during negotiations;
- Chinese economic activity has consistently declined since 1994, and large steel producers follow aggressive export strategies fuelled by an oversupply of steel products;
- China’s extraordinary economic growth is slowing down dramatically, and the Chinese domestic market for steel is retracting. As a result of all of the above factors, Chinese producers have to increase their exports further, at reduced prices, to rid themselves of excess stocks and
- Worldwide, countries are taking urgent action to raise tariffs and impose trade remedies to protect their domestic steel industries. The surge in imports that the SACU has been experiencing is expected to be augmented by the recent economic slowdown in China and the fact that China’s export markets are contracting rapidly.
ITAC decided that the MSA submitted prima facie information indicating that events cited by the MSA are regarded as unforeseen developments which, with the effects of the obligations incurred under GATT 1994, led to the alleged surge of imports of corrosion-resistant steel coils, as per the provisions of Article XIX of GATT 1994.
Allegation of Serious Injury and Causal Link
The period of investigation for data evaluation for the purposes of determining the allegation of serious injury is from 01 May 2021 to 30 April 2024. Furthermore, this application contains information regarding increased quantities of imports and the related serious injury for the surge period from 01 May 2023 to 30 April 2024.
The injury analysis relates to information submitted by AMSA, the major producer of corrosion-resistant steel coils in the SACU.
The MSA alleged and submitted prima facie evidence indicating that it is experiencing a serious injury in the form of a decline in sales, output, net profit, market share and employment during the surge period from 01 May 2023 to 30 April 2024.
Furthermore, an analysis of the investigation period from 01 May 2021 to 30 April 2024 indicates that the MSA experienced serious injury in the form of a decline in sales, output, net profit, market share, capacity utilisation, productivity and employment.
On this basis, ITAC found that prima facie evidence was submitted to indicate that the SACU industry was experiencing serious injury, which could be causally linked to the recent, sudden, serious, and significant surge in imports of corrosion-resistant steel coils.
LEGAL FRAMEWORK
This investigation will be conducted in accordance with the International Trade Administration Act, 2002 (ITA Act) and the ITAC Safeguard Regulations (SGR) read with the WTO Agreement on Safeguards (the Safeguard Agreement).
Please note that if any information is considered to be confidential, a non-confidential version of the information must be submitted for the public file simultaneously with the confidential version. In submitting a non-confidential version, the following rules are strictly applicable, and parties must indicate:
- Where confidential information has been omitted and the nature of such information;
- Reasons for such confidentiality;
- A summary of the confidential information which permits a reasonable understanding of the substance of the confidential information; and
- In exceptional cases, where information is not susceptible to summary, reasons must be submitted to this effect.
This rule applies to all parties and to all correspondence with and submissions to ITAC, which, unless indicated to be confidential and filed with a non-confidential version, will be placed on the public file and made available to other interested parties.
Suppose a party considers that any document of another party on which that party is submitting representations does not comply with the above rules and that such deficiency affects that party’s ability to make meaningful representations. In that case, the details of the deficiency and the reasons why that party’s rights are so affected must be submitted to ITAC in writing forthwith (and at the latest 14 days prior to the date on which that party’s submission is due). Failure to do so timeously will seriously hamper the proper administration of the investigation. Such party will not be able to subsequently claim an inability to make meaningful representations on the basis of the failure of such other party to meet the requirements.
Subsection 33(1) of the ITA Act provides that any person claiming confidentiality of information should identify whether such information is confidential by nature or is otherwise confidential. Any such claims must be supported by a written statement, in each case, setting out how the information satisfies the requirements of the claim to confidentiality. In the alternative, a sworn statement should be made, setting out reasons why it is impossible to comply with these requirements.
Procedures and Time Limits
All information submitted, including non-confidential copies thereof, should be received by the Senior Manager: Trade Remedies I by no later than 20 days from 27 December 2024. Late submissions will not be accepted.
Interested parties are invited to submit comments on the initiation of the investigation or any information regarding this matter to the following address:
Physical Address
Senior Manager: Trade Remedies I
International Trade Administration Commission of South Africa
Block E – The DTI Campus
77 Meintjies Street 0001
Sunnyside
Pretoria
South Africa
Postal Address
Senior Manager: Trade Remedies I
International Trade Administration Commission of South Africa
Private Bag X753
Sunnyside
Pretoria
South Africa
Any interested party may request an oral hearing provided that reasons are given for not relying on written submissions only. No request for an oral hearing will be considered more than 60 days from 27 December 2024. ITAC may refuse an oral hearing if granting such a hearing will unduly delay the finalisation of the investigation.
Parties requesting an oral hearing shall provide ITAC with a detailed agenda and a detailed version, including a non-confidential version, of the information to be discussed at the oral hearing at the time of the request.