The International Trade Administration Commission of South Africa (ITAC) has called for comment on the proposed increase in the ‘General’ rate of customs duty on stay wire, classifiable under tariff subheading 7312.10.27, from 5% ad valorem to the World Trade Organization (WTO) bound rate of 15% ad valorem, on which comment is due by 24 April 2023.
The application was lodged by Clear Creek Trading 167 (Pty) Ltd, trading as Wireforce, who reasoned that:
- The domestic industry manufacturing stay wire employs a significant number of people and has made significant investments over the years.
- There is an anomaly in the tariff structure as the main input material used in the manufacture of stay wire (wire rod) currently attracts a higher ordinary customs duty of 10% ad valorem whilst the end-product (stay wire) remains significantly below the WTO bound rate at only 5% ad valorem. The main input material (wire rod) used in the manufacture of stay wire is procured locally, thus supports local value-addition and supports the upstream steel sector;
- Stay wire products are currently imported at unsustainably low prices and, therefore, threaten the sustainability of the domestic manufacturing industry. This has, over the years, led to the erosion of the domestic market share to imports, mainly originating from Asian countries, whilst the domestic industry’s capacity utilisation remains substantially low;
- There is sufficient production capacity within the Southern African Customs Union (SACU) region to meet the demand requirements for stay wire. The applicant has, over the years, made significant capital investment in the manufacture of the subject product; and
- An increase in the general rate of customs duty will assist the industry by levelling the playing field vis-à-vis low-priced imported products, help the industry increase production capacity utilisation, retain existing jobs and create additional jobs.