Action aimed at product from India THE FIRST countervailing investigation has been launched by the Board of Tariffs and Trade, the responsible body in matters of unfair trading practices.
This action is one of the few methods available to a government to protect its industry from unfair trade - as in dumping and subsidised exports to the country - which meets with the approval of the World Trade Organisation (WTO), the international guardian of liberal trade practices.
In this case the action is being aimed at allegedly subsidised exports of porcelain insulators from India.
Although the necessary legislation to fight the problem of subsidised exports has existed for some time, this is the first time that it has been put into practice by the team, which has spent the last year preparing itself and building up capacity and expertise for these types of investigations.
While local industry has been quite robust on anti-dumping matters since SA re-entered the open, international marketplace, the issue of alleged government subsidy, although often suspected, has never been highlighted for countervailing action before.
It is the first time that a serious petition has been received from local industry requesting countervailing action, said Leora Blumberg, deputy chairperson of the BoT&T. And, therefore, the first time we have been able to initiate an investigation. And it's not necessarily an easy exercise, Blumberg added. It is difficult to get proof of subsidies, she said, and in this case we are obviously directly involving the government of India. But the first step in the action, following WTO protocol on Subsidies and Countervailing Measures, has been for the SA government to register its concern with the Indian authorities. With this completed, the BoT&T investigation team now follows the next course of approved steps in the investigation process.
In terms of the government Gazette notice (dated April 4, 1997) said Blumberg, interested parties have a period of 30 days in which to respond to the allegations, and make submissions. One example of the now WTO-discredited forms of government subsidy was to be found on home-ground. The SA export assistance under GEIS (General Export Incentive Scheme) - now being phased out before the end of this year - fell into this category.
By Alan Peat
