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Tough lessons to be learned from ITAC’s failure to renew potato tariffs

Statement by Francois Baird, founder of the FairPlay movement.

The unplanned expiry of anti-dumping duties on imported potato chips is a concern not only for South Africa’s potato industry, but for other industries threatened by dumped imports.

Immediately at risk is the potato industry, which had successfully proved dumping by Belgian and Netherlands potato producers of the chips for making french fries, and had secured anti-dumping duties to level the playing field. Those duties were due to expire in 2019 and local producers applied for an extension, known as a “sunset review”.

South Africa’s independent regulator, the International Trade Administration Commission (ITAC), had 18 months in which to investigate that application, but failed to complete the task in time. As a result, by default, the duties fell away in July 2021.

Now local producers fear a flood of imported potato chips, of frites, will grab market share and believes job losses are inevitable. That’s what happens when predatory foreign producers take aim at a South African market, as other industries know only too well.

It is those industries – poultry, steel, sugar and textiles among them – that will now have concerns at ITAC’s failure to complete an investigation in the time allotted. ITAC is currently investigating a sunset review application from the poultry industry for a continuation of anti-dumping duties against Germany, the Netherlands and the United Kingdom.

FairPlay hopes that threatened potato producers renew their application, and that ITAC is able to handle it expeditiously. Much of the groundwork will already have been done, and container loads of frozen potato chips will soon be on their way from Europe. 

ITAC has reportedly never failed before to complete sunset review, and it should ensure that it never fails again. Whatever went wrong, regardless of whether the fault lies with the organisation or potato producers, or a combination of both, must be addressed to ensure there can be no repetition.

ITAC has a central role in the investigation and administration of import tariffs. Its expertise has brought relief to vulnerable South African industries.  Confidence will have been shaken by the potato episode, and ITAC should take steps – preferably publicly – to restore trust in this critical organisation.