Economic development

SA trade investigations “slow and opaque”

Tariff investigations by South Africa’s trade regulator, the International Trade Administration Commission (ITAC) are taking far too long, according to Donald MacKay, head of XA Trade Advisors.

In a statement and remarks at a subsequent webinar, MacKay said tariff investigations in South Africa take on average 22 months to complete, with some cases even dragging for 47 months. This is despite ITAC’s recommendation that investigations not exceed six months.

He explained that there is no fixed time limit for trade investigations, unlike investigations into applications for anti-dumping duties, which have to be completed within 18 months.

MacKay said more than R3 billion was tied up in unresolved tariff issues – R1.4 billion in applications by companies seeking relief from duties, and R1.6 billion in applications for duty increases.

He said tariff applications should be settled speedily, as conditions could change rapidly. One application was lodged in 2019 and is still unresolved.

“It is impossible to manage trade in such a lethargic system. What applied in 2019 is very different to the real-world scenario in 2023 and trade decisions need to be based on the now, not the past.”

MacKay called for legislation to include specific timelines for tariff investigations, which would force ITAC to meet a deadline.

Decisions delayed

He also said there have been complaints about decisions lying on the desk of Minister of Trade, Industry and Competition Ebrahim Patel, gathering dust.

“It also appears that the minister frequently requires affected parties to give something back in exchange for the imposition of import duties. These reciprocal agreements could include commitments in respect of jobs, investments or transformation.

“These agreements are not transparent, or part of a formal process, nor do companies, in most instances, anticipate them, adding a further layer of complication and uncertainty to those industries applying for relief,” MacKay said.