Double setback for importers, producers of frozen potato chips
IMPORTERS of frozen potato chips in South Africa, as well as producers in Belgium and the Netherlands in particular, have suffered a double setback after the International Trade Administration Commission (Itac) imposed a provisional safeguard duty of 61.42% on the product late last week. The imposition of the hefty safeguard duty comes amid news that food company McCain, supported by other producers, last month also requested Itac to investigate claims that producers in Belgium and the Netherlands were dumping their products in South Africa at a discount rate of more than 51% and 22%, respectively. XA International Trade Advisors director Donald MacKay on Monday said the implications of the safeguard duty and the possibility of antidumping action were devastating.
Safeguard measures are used against any unforeseen surges of imports. Mr MacKay said XA had not seen a report detailing the logic behind the safeguard duty.
Importers and producers may take the provisional duty on judicial review, or the European Union may lodge a dispute against South Africa with the World Trade Organisation. But importers fiercely opposed the investigation, arguing that imports were a small proportion of local consumption.
Mr MacKay said earlier, when it was still unclear what the safeguard duties could be, that an increase of even 15% to 20% in duties would shut down imports, with the likelihood of local prices increasing in the absence of import competition. Imports from the European Union are currently duty-free, while there is a general duty of 20% on other regions’ imports.... Read the full, comprehensive news article and discuss at Business Day