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- Minister Ebrahim Patel said that consumers will not suffer unduly due to anti-dumping import duties on tyres imported from China.
- Patel said the import levy hike aimed to provide relief to local tyre producers who say cheap imports from China are costing them revenue and jobs.
- He said he would consult Cabinet colleagues and apply his mind to the interim levy while the public comments to ITAC.
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Trade, Industry and Competition Minister Ebrahim Patel has vowed that consumers will not suffer unduly due to anti-dumping import duties on tyres imported from China.
He also stressed that the process had not yet been finalised and was subject to public comment.
Patel was replying to questions from members of Parliament (MPs) in the National Assembly on Wednesday afternoon, in the wake of an interim excise duty increase of 38.33% being introduced by the International Trade Administration Commission (ITAC) earlier this year in a bid to discourage dumping. The Tyre Importers Association of South Africa has since taken legal steps to oppose the move, arguing that the legislation backing ITAC's decision has not yet been promulgated.
The South African Tyre Manufacturers Conference (SATMC), meanwhile, had applied to ITAC for relief from cheap tyre imports from China. SATMC said exposure to the low prices would cause local producers material injury and cause the sector to lose jobs.
Replying to a question from IFP MP Nsikayezwe Cebekhulu, Patel stressed that the process was still at an early stage and subject to extensive consultation.
He said the introduction of the import levy was done in line with the accepted procedures for excise hikes, where injury to local producers by cheap imports first had to be established.
"Four firms came together to request an anti-dumping duty on types from China. These firms hire up to 6 000 people. The first test is you have to show material injury. The secondary test is to prove that the injury is a result of the dumping," Patel said.
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Patel said the two-stage process of anti-dumping duties includes an ITAC investigation, after which the commission calls for comment. If ITAC has grounds to say that the injury is substantial and can prejudice local firms, they can introduce an excise duty for six months, he said.
"During that period, ITAC must complete its investigation. They must make a recommendation to the ministry, and I must apply my mind and make a decision. In this case, the first phase is where we are, with an interim dumping duty. As soon as the investigation is complete, they will come with a recommendation," said Patel.
Patel said the interim import levy determined by ITAC could be imposed, extended, adjusted or removed, depending on his discretion following the public comment and Cabinet consultation process.
"I have had no communication with any of the ministers because at this stage I am not yet required to apply my mind to the matter. ITAC has called for public comment and will weigh them up in its recommendation. We have not got to the point where I must decide," he said.
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Asked how import levies would grow the auto sector and the South African economy, Patel said the sector could use the levies as an opportunity to take up space that local and continental producers have not had a chance to occupy.
"Tyres are part of the ecosystem in the auto industry. We are the biggest car maker on the continent. While Africa accounts for 17% of the world's population, we produce fewer than 1% of cars and steel output. This is the challenge we are grappling with," said Patel.
Patel said there would always be the import of tyres due to the structure of the sector in South Africa. He added that there would always be a supply of tyres from outside of South Africa. He said the government was consulting the sector on import requirements for various categories of tyres.
"The standards that apply in the domestic market on tyres, whether local or imported, is to ensure that the specifications are in force for each batch. Therein lies the challenge we should be alert to. In our case, trading arrangements permit imports of new and rethreaded tyres. It is under discussion between the government and the sector," he said.
