Are dumping investigations losing favour to tariff applications, and particularly application for the increase in the rate of customs duty? When considering recent tariff applications and the recent increase in the rate of customs duty amendments as reported in this publication the answer seems to be a resounding “yes”. In the early 1990s when the establishment of a dedicated Trade Remedies division then Anti-Dumping division was touted, one of the issues impacting its establishment was that the increase in the rate of customs duties was the preferred policy instrument. Coupled with this the fact that it was pre the establishment of the World Trade Organisation (WTO) a “bound rate” did not exist. So there was effectively no ceiling on the rate of customs duty that could be imposed. In addition, one of the defining reasons for the persistence of applicants continuing to pursue the increase in the rate of customs duty applications was that it took less time to complete. In Friday’s Government Gazette something interesting happened. The first that this author has observed being the increase in the rate of customs duty in respect of products on which anti-dumping duties are already imposed. The anti-dumping duties are 11.09%, 19.3%, 55.4%, 73.93% and 122.7% depending on the company or origin, from a single country of origin. The following arguments are offered in the application: (i) Sacu manufacturers need to be protected against price undercutting from Chinese exporters exempted from the existing dumping duty on fasteners (Duty Bound Comment: it is not understood how Chinese exporters can be “exempted” from the existing anti-dumping duty. Rather there are residual anti-dumping duties which vary based on the extent of the anti-dumping determined during the Itac investigation/verification.); (ii) CBC Fasteners (Pty) Ltd is unable to recover manufacturing overheads at the current low levels of production. There is an urgent need for CBC Fasteners (Pty) Ltd and other Sacu manufacturers to increase the volumes required to sustain critical mass and have sustainable businesses that continue to contribute to employment whilst maintaining investment (Duty Bound Comment: does this mean that there will be an increased selling price of the domestically manufactured product? The rise of the dreaded “import parity pricing”. Also the attempt, futile, in establishing a link between tariffs, investment, and employment.); (iii) Domestic producers are facing significant price disadvantage against imported screws, bolts and nuts from Asian countries (Duty Bound Comment: what is this attributable to? Where in all the argument does the productivity of the domestic manufacturers feature? Or is the increase in the rate of customs duty required to compensate for the lack of productivity. As a passing thought, the impact of administrative prices imposed on domestic manufacturers?); (iv) The dumping duties imposed by Itac against imports from China are a clear indication that there is a problem in the industry. Therefore, the requested duty increase of 20% ad valorem is justified (Duty Bound Comment: This is astonishing. Limiting the response to a single comment, is the underlying assumption that the increase in the rate of customs duty will solve it all?); and (v) Increasing the customs duties on the bound level of 30% ad valorem will level the playing field for manufacturers (Duty Bound Comment: just how does an increase in the bound rate of customs duty level the playing field?); . As a general comment on the reasoning of the application, it is evident that the incorrect tariff and trade policy instrument is being applied for. The argument and substantiation of dumping is essentially used as substantiation for the increase in the rate of customs duty. So anti-dumping duties are in force and now the rate of customs duty is proposed to be increased to its maximum – anti-dumping top-up or anti-dumping plus. Just if and how these measure will benefit the domestic industry remains. The only measure that is not addressed is the weakening of the rand which could provide an additional top-up by providing what is known as “natural protection”. Just how is the consumer benefiting? When Itac concludes its investigation and publishes its report, and should the recommendation have been for an increase in the rate of customs duty, it would make interesting reading since according to Itac, tariff amendments will be conditional on a commitment by beneficiaries to how they will perform against government’s set policy objectives, in particular employment and investment. Itac also advises that tariff increases will be tied to a specific period of time after which tariffs may be reviewed.