The Tyre Importers Association of South Africa (Tiasa) has taken its battle with the International Trade Administration Commission (Itac) and the SA Tyre Manufacturers Conference (SATMC) over an application to hike import duties, to the Pretoria High Court.
Tiasa has asked the court to force the SATMC to disclose critical information regarding its application for anti-dumping duties on imported tyres, which it alleges tyre manufacturers have withheld. It is also challenging the way Itac is conducting the investigation.
SATMC, which comprises Continental, Bridgestone, Goodyear and Sumitomo, has applied to Itac to impose additional duties of between 8% and 69% on passenger, taxi, bus and truck vehicle tyres imported from China. Import duties on tyres are currently between 25% and 30%.
Tiasa chairperson Charl de Villiers said importers were “operating in the dark” regarding the application.
“If Itac decides to impose the maximum duty percentage requested by SATMC, we could see price increases range from 41% for taxi tyres, 38-40% for passenger tyres, and an average of 17% for truck and bus tyres. These increases will have dire consequences for commuters, the transport sector, and consumers, who are struggling with climbing inflation,” De Villiers said.
Domestic manufacturers are unable to produce the full range of tyres and import 80% of the variety that they sell to meet local demand.
Tiasa said that while the SATMC conceded that in addition to manufacturing tyres locally, it also imported tyres, it had refused to disclose what they imported, from where, and for what reason.
XA Global Trade Advisors CEO Donald MacKay said the information was critical as causality was a foundational principle of an anti-dumping case.
“In other words, it’s necessary to prove that any injury to the local industry must have been caused by the dumping, and not by something else. If SATMC members are importing a significant volume of tyres themselves, they would be inflicting their own injury, which would need to be offset for any injury they claim. They would therefore need to demonstrate a compelling reason for the imports.
“This is not confidential information, and it is material to their import duty application and their rationale. For example, we know Continental and Goodyear import 100% of truck and bus tyres, yet these domestic producers are importing these tyres instead of purchasing them from the other domestic producers who do manufacture them locally. Why? SATMC has refused to share any of this information with Tiasa and Itac has accepted this,” he said.
He added that Itac had received an enormous response to its investigation from more than 60 companies but had only reviewed a small sample of submissions as the basis for its final decision.
MacKay said: “With a complex product like tyres, where the local market sells over 3 000 different models, it is almost impossible to select a truly representative sample. To base a duty decision on such a flawed process, is deeply concerning.”
Tiasa is asking the court to direct Itac to remedy its sampling, provide Tiasa with SATMC’s import data, and the reasons for their imports, and to allow Tiasa sufficient time to make a submission to Itac before it takes any decision on the imposition of duties.
De Villiers said: “If the current process is not corrected, it’s likely that Itac will impose provisional duties without SATMC’s import information, or indeed Tiasa’s submissions which have - to date - been excluded from consideration by Itac. This will be a clear impingement on the rights of affected parties to meaningfully participate in this process.
“But most concerning, Itac’s decision will add a significant cost burden to motorists, taxi and bus operators, and trucking and logistics companies. This means that it is South Africa’s cash-strapped consumers who will bear the brunt of increased protection for the four tyre manufacturers. But it’s a safety issue too. Vehicle owners, when faced with such dramatic cost increases, may trade down to second-hand, illegally regrooved or illicit tyres, or simply delay replacing their tyres, placing every road user at greater risk of accidents.”
