On 24 August 2021, the International Trade Administration Commission of South Africa (ITAC) called for comment on the proposed increase in the “General” rate of customs duty on:
(1.) Other paper and paperboard, not containing fibres obtained by a mechanical or chemi-mechanical process or of which not more than 10 per cent by mass of the total fibre content consists of such fibres, of a mass of 55 g/m² or more but not more than 90 g/m², of a width exceeding 150 mm in the unfolded state, classifiable in tariff subheading 4802.55.20, by the creation of a new 8-digit tariff subheading for the said goods;
(2). “Other paper and paperboard, not containing fibres obtained by a mechanical or chemi-mechanical process or of which not more than 10 per cent by mass of the total fibre content consists of such fibres, of a mass of 40 g/m² or more but not more than 150 g/m², in sheets with one side not exceeding 435 mm and the other side not exceeding 297 mm in the unfolded state, other, classifiable in tariff subheading 4802.56.90; and
(3.) Other paper and paperboard, not containing fibres obtained by a mechanical or chemi-mechanical process or of which not more than 10 per cent by mass of the total fibre content consists of such fibres, other, of a mass of 55 g/m² or more but not more than 90 g/m, in strips or rolls of a width exceeding 150mm in the unfolded state, classifiable In tariff subheading 4802.57.20, by the creation of a new 8-digit tariff subheading for the said goods;
Comment is due by 20 September 2021.
The application was lodged by Mondi South Africa (Pty) Ltd who reasoned that:
(a) The paper industry is under significant pressure due to a structural decline in the South African market, which has been accelerated by Covid-19 impacts and ongoing threats from imports.
(b) The purpose of this application is to improve the industry’s long-term sustainability, thereby protecting jobs, livelihoods and the economic contribution the industry makes towards the national fiscus.
(c) The market decline has been accelerated by Covid-19 as business and people have changed the way they work. Working from home and accelerated digitalisation has had a noticeable adverse impact on paper consumption.
(d) Imports continue to be a significant portion of the South African market and compete directly with South African producers. Surplus global capacity and a decline in global consumption will result in ongoing and continued threats from imports. The continued price under-cutting by importers continues to make it challenging for local manufacturers to secure the required volumes to sustain profitable operations. The applicant was forced to permanently close capacity in 2018 as it was not profitable to maintain the paper machine.
(e) Mondi indicated that South African producers faced ongoing cost pressures, most notably annual labour and electricity increases. The applicant submitted that importers do not face the same, ongoing cost escalations, which further weakens the South African industry’s competitive position.
(f) Lastly, Mondi indicated that they were forced to curtail production in both 2020 and 2021 on their only remaining uncoated paper machine due to the aforementioned weak demand. Imports were a significant factor in the decision to slow down production and take days of production downtime
The notice is accessible at:
https://www.gov.za/sites/default/files/gcis_document/202108/45043gen499.pdf