The International Trade Administration Commission of South Africa (Itac) announced a proposed increase in the ‘General” (Most Favoured Nation or MFN) rate of customs duty on large bore welded steel pipes, classifiable under tariff headings 73.03, 73.04, 73.05, and 73.06, from free of customs duty and 10% ad valorem to 15% ad valorem.
The application was lodged by Hall Longmore Pty (Ltd) who argued that they had recently invested a substantial amount in upgrading their Electric Resistance Welded (ERW) mill to ensure that the Southern African Customs Union (SACU) market could be serviced at the right quality. This investment contributed to retaining jobs locally. However, the local industry cannot be sustainable in the face of low priced imports; Hall Longmore (Pty) Ltd manufactures bore welded steel pipes classifiable under tariff headings 73.05 and 73.06. However, there are close substitutes which compete directly with these products. These include ductile and seamless pipes which are classifiable under tariff subheadings 7303.00, 7304.19, 7304.23 and 7304.29. Therefore, Itac must also consider these substitutes for an increase in the general rate of customs duties; and the domestic market share has declined even though the applicant is the only manufacturer of ERW steel pipe range in the SACU.
Comment due on 22 May 2015.
