International Trade Administration Commission of South Africa Policy Change on Tariff Protection
11 December 2013
Posted by: Author: Andre Erasmus
Author: Andre Erasmus (ENS)
On 22 November 2013, The International Trade Administration Commission of South Africa ("ITAC”) gave notice of a policy change in adjudicating customs tariff investigations though the implementation of revised customs tariff amendment questionnaires.
Applications for increases or reductions in the rate of customs duties or for the creation of rebate facilities must, with effect from 1 January 2014, be submitted to ITAC in the format of the revised questionnaires.
ITAC now takes a developmental or strategic approach to customs tariffs and has begun to make all tariff support conditional to reciprocal commitments by applicants to gauge the performance of beneficiaries against the policy objectives of increased economic growth and competitiveness and employment creation and retention.
ITAC considers an increase in customs duties as granting relief to domestic producers that may be experiencing threatening import pressures to adjust and restructure so that in the medium to long-term they could become internationally competitive without any support in the form of customs duty protection. Customs duty support will therefore be tied to conditions related to economic performance over time and will be reviewed after a specified period.
Applicants must now provide ITAC with an indication of what the increased economic benefits would be over a three year period should the tariff support be provided by providing the following reciprocity commitments:
- Expected total production volume
- Expected ex-factory selling price per unit of measurement
- Expected total investment in Plant, Machinery and Buildings
- Research and development
- Skills development and training
- Upgrading machinery
- Expected total export volume and value
- Expected total Employment and Wages of Skilled, Semiskilled and Unskilled labour
Applicants must now also provide a development plan, restructuring plan or other relevant strategies to accelerate the achievement of the reciprocity commitments. This is a significant change.
This article first appeared on ensafrica.com.