Anti-dumping dispute addresses crucial issues

A recent Supreme Court of Appeal ruling over an anti-dumping dispute brought by the SA Tyre Manufacturers’ Conference (Pty) Ltd (SATMC) against the International Trade Administration Commission (Itac) provides some valuable lessons for local importers. The case addresses a number of important issues, says Freek Van Rooyen of Customs @ Wylie. “It deals firstly with when dumping occurs, secondly with the calculation of the normal value and thirdly with when international treaties to which SA is a party can result in rights flowing from such treaties to SA citizens.” Importantly for current purposes, he says, it demonstrates that any litigant who wants to challenge a government body and rely on international treaties must, before embarking on any such action, ensure that those treaties are part of the local legislation. “Unless this is the case, relying on such treaties is futile,” says Van Rooyen During 2005 the SATMC submitted an application to Itac requesting the initiation of an anti-dumping investigation into certain tyres imported from China and allegedly being dumped in South Africa. “Generally dumping occurs when imported goods – in this case certain types of tyres – imported from China are imported at a price less than the normal value ie, generally the selling price in the country of export, or the country where the tyres originated, in this case China,” Van Rooyen explained. Itac initiated an investigation, and in February 2007 released a final report recommending to the Minister of Trade & Industry that the investigation into the alleged dumping of the tyres be terminated. The SATMC in October 2007 launched a review application to have the termination set aside. They succeeded in the High Court in Pretoria but on appeal to the Supreme Court of Appeal, Itac’s appeal was successful. “Although the requirements of dumping are addressed, in our view what is very important flowing from this judgement is when international treaties become binding in SA,” said Van Rooyen. “For that to happen they must be enacted into law in SA,” he said. “The relevance is that in this application SATMC presented its case on the basis that certain rights and obligations were infringed – in particular the General Agreement on Tariffs and Trade of 1947 (GATT) and the China Protocol, agreed when the People’s Republic of China joined the World Trade Organisation. “By enacting the International Trade Administration Act and regulations promulgated in terms of the Act, certain aspects of the GATT were legislated in SA. However, the government did not for example enact the China Protocol as part of the SA domestic laws. “In this case it was made clear,” said Van Rooyen, “that unless international treaties are enacted into law in SA, no rights and obligations will flow from such treaties even though the government may have certain commitments in terms of those treaties. “In the review application, the status of China as a market economy country was relevant for purposes of calculating the normal value. The review was based on the premise that the Chinese exporters had to prove it had a market economy. In the absence of the China Protocol being enacted into SA law, there was no such onus on the exporters to prove that China had a market economy. “Itac’s approach in ascertaining the normal value ie, the local price in China, by determining the selling prices in China in the ordinary course of trade for like goods, was endorsed. This was an important factor in overturning the High Court’s initial judgment in setting aside Itac’s decision to terminate the investigation.”