Public interest will determine implementation of anti-dumping rulings

Substitutable products must be readily available from other sources
ALAN PEAT
PUBLIC INTEREST is to become a determining factor in anti-dumping findings in SA, according to Heather Irvine, director of law firm Deneys Reitz. The International Trade Administration Commission (Itac), which is designed to protect domestic producers from ‘dumping’ by foreign manufacturers, recently published amendments to its anti-dumping regulations for public comment before last December 18, according to Irvine. “It is an unfair trade practice for a manufacturer to sell its product at a price lower than the price it charges in its own country,” said Irvine, “simply because it has a large amount of excess production that it can ‘dump’ for foreign consumption – and thereby undercut local producers. “Dumping is thus the introduction of goods into a country at a price which is less than the normal price charged in the country of origin.” Irvine believes one of the most important amendments is the introduction of Section 20, which calls for the commission to consider the impact of a proposed duty on public interest. “Accordingly,” she said, “once an import duty has been recommended, the minister of trade and industry can call for a further inquiry into whether there are reasonable grounds to conclude that a duty is not in the public interest.” This determination will require the commission to undertake a much broader investigation of the domestic market to determine whether there are other different but substitutable products which are readily available from other sources. But Irvine stresses a number of cons in her analysis of the new regulations. Despite being based on a consideration of “any relevant factors”, certain clauses in the proposed rulings are not clearly defined, and some of the concepts are not easily defined. Other factors listed also pose difficulties, according to Irvine. “For example,” she said, “how will the commission determine whether a particular duty is likely to substantially lessen the “competitiveness” of domestic producers in the future? “The commission is also not limited to considering the factors set out in the regulation. It could take into account factors such as the need to preserve employment, the retention of scarce skills, the promotion of black economic empowerment or the protection of a strategically important industry.” Given this, Irvine suggested that the regulation should provide for the notification of potentially interested parties who may wish to participate in the proceedings – such as organised labour, environmental organisations, consumer groups and the competition authorities. “It should also specify which party bears the burden to show that a duty is not in the public interest,” she said. Apart from an added workload on Itac, Irvine also stressed that the commission would be forced to evaluate complex social and economic factors – and balance a range of competing policy interests. “This,” she said, “may significantly alter its role and the character of anti-dumping investigations and could potentially expose its processes to interference from lobby groups, organised labour and politicians.”