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Safeguards in South Africa: What lessons from the first investigation?

Trade Reports

Safeguards in South Africa: What lessons from the first investigation?

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Nearly 13 years after the establishment of the World Trade Organization (WTO) and three years after promulgating safeguard regulations (SGR), South Africa finally initiated its first safeguard investigation on 11 May 2007. On the same day the International Trade Administration Commission (ITAC) imposed a provisional safeguard measure of 160 per cent on the basis of critical conditions. In South Africa the product under investigation, lysine (a feed supplement), has been the subject of several trade remedy applications since 1999. This raises serious questions regarding the procedure to be followed in safeguard investigations, including what would qualify as critical conditions, and whether interested parties should be afforded the opportunity to make representations to ITAC before a preliminary determination is made.

The working paper considers the domestic and international legal requirements and the facts applicable to the specific investigation, which include ITAC’s failure to distinguish between two different types of lysine with different lysine content and the fact that China was responsible for virtually the full increase in the volume of imports. Considering the procedure adopted in the initiation and imposition of provisional measures and the recent treatment of China in anti-dumping investigations, the working paper raises the question whether the domestic industry will resort to safeguard applications rather than anti-dumping applications in future.

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