ITAC STRATEGIC PLAN BRIEFING TO THE PORTFOLIO COMMITTEE ON ECONOMIC DEVELOPMENT. 27 March 2013 Siyabulela Tsengiwe Chief Commissioner

Transcription

1 ITAC STRATEGIC PLAN BRIEFING TO THE PORTFOLIO COMMITTEE ON ECONOMIC DEVELOPMENT 27 March 2013 Siyabulela Tsengiwe Chief Commissioner

2 Contents 1. Mandate. 2. Key Strategic Objectives, Performance Areas & Services. 3. Situational Analysis and Implications for ITAC. 4. Achievements. 4.1 Investigations. 4.2 APDP and MIDP. 4.3 Judicial Reviews. 5. Challenges 5.1 Procedure and time frames. 5.2 Impact Assessments. 5.3 Organisational Development. 6. Trade Remedies

3 Strategic Objectives Mission Vision Mandate ITAC s Mandate, Vision, Mission, and Key Strategic Objectives The aim of ITAC, as stated in the Act, is to foster economic growth and development in order to raise incomes and promote investment and employment in South Africa and within the Common Customs Union Area by establishing an efficient and effective system for the administration of international trade subject to this Act and the SACU Agreement. An institution of excellence in international trade administration, enhancing economic growth and development. ITAC aims to create an enabling environment for fair trade through: efficient and effective administration of its trade instruments; and technical advice to the Economic Development Department and thedti. 21 days Ensure appropriate contribution to employment creating growth and development through provision of its international trade instruments. Ensure strategic alignment and continued relevance within the Economic Development Department and national agenda. Ensure organisational efficiency and effectiveness through business support services.

4 Key Strategic Objectives, Performance Areas & Services Ensure contribution to employment creating growth and development through effective delivery of international trade instruments International Trade Instruments What will be pivotal in improving the provision of customs tariffs, trade remedies, and import and export control will be the quality and turnaround times. Customs Tariff Investigations [Increasing Duties, Reducing Duties, & Creation of Rebates] Trade Remedies Investigations [Antidumping, Countervailing & Safequards] Import & Export Control [Permits & Enforcement] Ensure strategic alignment and continued relevance with the Department of Economic Development and national agenda International Trade Technical Advice ITAC will become more proactive in the provision of technical inputs 21 days and contributions to trade and industrial policy implementation, as well as trade negotiations at bilateral, regional and multilateral levels. Technical Inputs on Trade and Industrial Policy including Sector Strategies Technical Inputs on Trade Agreements [WTO, SADC & SACU] ; Bilateral Agreements [EU, EFTA, MERCOSUR, & INDIA] Business Support Services Ensure organisational efficiency and effectiveness of ITAC The performance of the institution will be driven through appropriate business solutions, efficient and effective utilisation of material, human and information technology resources. ohuman Resources ofinance oinformation Technology olegal Services opolicy and Research

5 S I T U A T I O N A L A N A L Y S I S And I M P L I C A T I C A T I O N S FOR ITAC

6 Global and domestic environment South Africa is a globally integrated economy. The Eurozone crisis with a major part of the European Union in recession. Economic recovery remains sluggish in the US. Emerging economies in particular China and India continue to lead global growth. Global economic growth is estimated to increase marginally from 3.2% in 2012 to 3.5% in 2013.

7 Global and domestic environment South Africa s economic growth rate was 2.5% in 2012 and is expected to grow at 2.7% in SA s trade performance remains a huge challenge. Exports grew by just 1.1% while imports grew by 7.2%. Manufacturing is slowly recovering save for the increasing cost pressures and cheap imports.

8 ITAC Response and industry Alignment of the instruments to government policy. Revised time frames months (trade remedies) and on Tariff investigations 12-6 months. Quality: Procedure and substantive issues. Compliance with the law. Steady rise in the use of trade remedies. Considerable rise in tariff increases. Export control in support of local beneficiation.

9 The continent and regional integration Africa has a market of over 1 billion and is growing fast. Africa accounts for 18% of our total exports. Tripartite Free Trade Area. SADC consolidation. SACU.

10 A C H I E V E M E N T S

11 Tariff Investigations 2012\2013 APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT Kaymac Geo-synthetic clay liners Free 25% Increase Uniresins (Pty) Ltd Alkyd resins Free 15% Increase Blue Ocean Mussels Mussels Free & 5.5c/kg 25% Increase Pioneer Foods (Pty) Ltd Uncooked pasta, not stuffed or otherwise prepared 30% - 40% Increase ITAC Salmon & Trout Remain at 25% Increase Foodcorp (Pty) Ltd Sardines in airtight containers Declined Increase Grain SA Dollar based reference price - wheat In process Increase Collier Tool & Die CC Lawn mower blades Free 20% Increase Ellies Holdings (Pty) Ltd Outdoor Aerials Free 20% Increase Peninsula Drums CC Conical drums Free - 15% Increase ITAC Set top boxes Free - 15% Increase Shatterprufe, USG Autoglass CC, FGW Safety Glass (Pty) Ltd & National Auto Glass (Pty) Ltd Laminated automotive windscreens 15% - 30% Increase Cobra Watertech (Pty) Ltd Taps and Mixers In process Increase RIC Manufacturing CC PTFE tape In process Increase

12 Tariff Investigations 2012\2013 APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT Jensen Belts Buckles, magnetic locks & studs for belts Declined Rebate Paciwave (Pty) Ltd Fabric for bulk containers Declined Rebate Bagshaw Footwear Leather for protective footwear Declined Rebate Nyathi Textiles Fabric for impregnation or coating Declined Rebate ITAC Worn overcoats Approved quota Rebate Kiran Global Caustic Soda for Meta-silicates In process Rebate Bidvest Paper Plus (Pty) Ltd Mechanisms for lever arch files Approved Rebate Department of Trade and Industry Rebate for Automotive Production and Development Programme Rebate Approved Rebate GRW Engineering (Pty) Ltd) Certain parts for refrigerated trailers Declined Rebate

13 Tariff Investigations Continued APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT Colas (Pty) Ltd Petroleum Bitumen Approved Rebate ITAC Rebate & Approved merging rebates Rebate ITAC Worn clothing for wiping rags Approved tightening of Guidelines Rebate ITAC Rebate for Set Top Boxes to exclude populated PC Boards and other designated inputs Approved Rebate ITAC Tyres for organised motor sport & agricultural/ forestry vehicles & machines Approved Rebate Department of Trade and Industry Temporary deeming of imported aluminium/ steel for the manufacture of wheels Approved Rebate ITAC Extension of the claiming period for Productive Asset Allowance programme to Approved Rebate EDD SKD manufacturing for Minibuses and Midi buses Approved Rebate ITAC Claiming under the Productive Asset Allowance by component manufacturers, whereby the OEM transferred its project to participate under the Automotive Investment Scheme Approved Rebate

14 Tariff Investigations Continued APPLICANT PRODUCT APPROVED AMENDMENT TYPE OF AMENDMENT SABAC (Pty) Ltd Brake fluid Approved 10% - free Reduction Giants Canning (Pty) Ltd White Pea beans Declined Reduction General Mills Frosting Declined Reduction Hudaco Trading (Pty) Ltd AC generators and alternators Approved 5% & 10% - free Reduction Massmart Camp Chairs Declined Reduction Divfood subsidiary of Nampak Aluminium slugs Declined Reduction Capco CC Mineral fibre ceiling tiles Declined Reduction

15 Trade Remedies Investigations ORIGINAL ANTI-DUMPING INVESTIGATIONS Product Country Applicant Type Status and Duties Frozen chicken and parts Brazil Southern African Poultry Association Anti-dumping Finalised. No duty. Frit Brazil Ferro Industrial Products (Pty) Ltd Anti dumping Finalised. 24,65% -Smalticeram Do Brasil 50% - others. Threaded rods PRC South African Fasteners Manufactures Association Threaded screws PRC South African Fasteners Manufactures Association Anti-dumping Anti-dumping Finalised. No duty. Finalised. Duties. Coated Paper PRC, Korea Sappi Fine Paper Anti-dumping In progress preliminary phase. Unframed Mirrors PRC PFG Glass Anti dumping In progress preliminary duties imposed. ANTI-DUMPING REVIEWS Product Country Applicant Type Status and Duties PVC Rigid PRC, Chinese Arengo Sunset Review In progress final phase. Taipei Acetaminophenol PRC Anqui Lu an Pharmaceutical Co New Shipper Review Finalised. No duty. Ltd Hand Tools PRC Lasher Tools Sunset Review In progress final phase. SAFEGUARD INVESTIGATIONS Product Country Applicant Status and Duties Frozen Potato Chips (French Fries) All McCain (Pty) Ltd In progress preliminary phase.

16 APDP and MIDP The Automotive Production and Development Programme regulations, rebate and guidelines have been finalised for implementation this year. With the introduction of the Automotive Production and Development Programme, the Motor Industry Development Programme will be phased out. The Automotive Production and Development Programme replaces the Motor Industry Development Programme and the objective is to create an enabling environment for the domestic industry to significantly grow production volumes and local value addition, leading to the creation of additional employment opportunities across the value chain.

17 Judicial Reviews Different and opposing interest in the value chain. WTO Dispute Settlement Mechanism. Litigation in other Jurisdictions Court Cases.

18 C H A L L E N G E S

19 Procedure for conducting Tariff Investigations Receipt of Application Properly Preliminary Exco-Sub Documented Submission Committee 19 Application Commission s Preliminary Determination 10 Government Gazette Notice Commission s Final Exco-Sub Final Submission Committee Determination 15 Reports & Submission 10 Minister of Trade and Industry Deputy Minister of Finance Publication Notice by SARS 148 Days = 6 Months

20 Procedure for conducting AD Investigations Properly documented application Applicant verification prep Merit SM approval Merit Implementation 21 submission 7 & place on decision of decision prep agenda Notification initiation of investigation Sending exporters verification reports 14 Verification of exporters Verification plan for 14 importers & exporters & verification of 14 importers Responses on deficiencies Identify Exporter/ 12 deficiencies and 7+30 importer send letter responses 2 Comments on verification reports 7 Finalise prelim & submit agenda 10 Commission prelim. decision 21 days 18 Prelim report ready for SM 2 Prelim report approval by CC 10 Publication of provisional payments Essential facts letters 18 Final decision Final submission on agenda 18 Provision for an oral hearing 21 Comments on prelim. report 2 Sending out prelim. report & notice 21 Total days: 274 (9 months) Total days: 309 (10 months) 3 Comments on essential facts 7 Final submission after essential facts 18 Comn. final decision after essential facts 10 Final report approval by Chief Comm. 14 Approval by Minister 21 SARS publication

21 Impact Assessments ITAC has begun with assessing the impact of its instruments at a sectoral level. Tariff support is now conditional to reciprocal commitments by beneficiaries against policy objectives of production, investment and employment. The monitoring is done annually and in 3 year reviews. Getting cooperation from firms to supply the necessary data is a challenge that ITAC is grappling with.

22 Organisational Development The work of ITAC is increasingly demanding and expanding and therefore the need for organisational development has become a priority. The tough global economic conditions and increasing cost pressures for domestic producers have led to increased demand for ITAC instruments. Time frames for investigations have been shortened whilst ensuring that quality is not compromised. The introduction of the APDP and the initiation of tight export controls using a price preference system on scrap metal. Trade monitoring and evaluation, including impact assessments. There is a pressing need to boost human resource capacity and in this regard ITAC is working closely and in cooperation with EDD on its organisational development. The staff compliment of ITAC is 131 with 100 positions in the core business and 31 positions in support services.

23 T R A D E R E M E D I E S

24 Trade Remedies Objectives: Enable fair trade in order to sustain domestic production, retain and create jobs and promote international competitiveness. Anti-dumping measures are taken against injurious dumped imports. Dumping is used to refer to a situation where goods are sold to a foreign market at prices less than the country of origin. Countervailing measures are used against subsidised imports that threaten and/or cause injury (i.e. decrease in prices; loss of market share; decrease in profits; decrease in sales volumes; job losses etc.) to the domestic manufacturer. Safeguards are actions against trade that may be regarded as fair but overwhelms domestic producers. Safeguards are used against an unforeseen surge of imports that threatens and/or causes injury to the domestic producers.

25 Dumping & Anti-dumping (AD) Actions Dumping: Selling goods at a lower price in the export than the domestic market. Firms engage in geographical price discrimination to maximise profits. The problem arises when dumping threatens and/or causes injury to domestic manufacturers (Decline: Prices; Sales Volumes; Profits; Market shares; Job losses etc.) Since Dumping is regarded as an unfair trade practice the WTO AD Agreement sets out the rules for acting against dumping that causes injury. South Africa is an old and active user of the instrument with the first law on AD having been enacted in 1914.

26 Turnaround times Comparison with other Jurisdictions South Africa US EU Canada India Brazil Australia 10 Months 9 Months 14 Months 7 Months 12 Months 12 Months 5 Months

27 SA s use of Anti-dumping Since the founding of the WTO in 1995 to 2010, the top users of the anti-dumping instrument have been, in terms of the number of investigations initiated India: 613 United States: 442; European Union: 414; Argentina: 277; and South Africa: 222; Australia: European Union United States Australia Argentina India South Africa Anti-dumping investigation initiations by reporting member Source: WTO data files and ITAC

28 TRADE REMEDY INITIATIONS 1 January December 2011 Total 4,513

29 WTO Disputes vs. Trade Remedies + Subsidies Disputes (Based on panels established)

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