G/SG/N/8/ZAF/3/Suppl.1  
G/SG/N/10/ZAF/3  
G/SG/N/11/ZAF/3  
 
27 April 2017  
(17-2314) Page: 1/5 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT  ON 
SAFEGUARDS ON FINDIN G A SERIOUS INJURY  OR THREAT  
THEREOF  CAUSED  BY INCREASED IMPORTS  
 
NOTIFICATION UNDER A RTICLE 12.1( C) OF THE  AGREEMENT  
ON SAFEGUARDS ON TAKING A DECISION  
TO APPLY A SAFEGUARD  MEASURE  
 
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2,  
OF THE AGREEMENT ON SAFEGUARDS  
SOUTH AFRICA 
(Certain flat hot -rolled steel products ) 
The following communication, dated 24 April 2017, is being ci rculated at the request of the 
Delegation of South  Africa . 
 
_______________  
In light of the agreed format for notifications (G/SG/W/1, 23 February 1995), South Africa 
provides notifications to the Committee on Safeguards of findings of serious injury or threat 
thereof caused by increased imports and proposed safegu ard measures.  
On 24 March 2016 , the International Trade Administration Commission (the Commission) initiated 
an investigation for remedial action in the form of a safeguard against the increased imports of 
certain flat hot -rolled steel products.  
On 18 Jul y 2016, the Commission communicated its proposed preliminary determination to the 
WTO. The preliminary determination was published in the Government Gazette on 22 July 2016.  
The initiation of the investigation and the preliminary determination has been not ified to the 
Committee on Safeguards (see WTO documents (G/SG/N/6/ZAF/4 and G/SG/N/8/ZAF/3).  
1  THE PRODUCT SUBJECT TO THE INVESTIGATION  
The subject product is described as certain flat -rolled products of iron, non -alloy steel or other 
alloy steel (not includ ing stainless steel), whether or not in coils (including products cut -to-length 
and 'narrow strip '), not further worked than hot -rolled (hot -rolled flat), not  clad, plated or coated, 
excluding grain -oriented silicon electrical steel , imported under tariff subheading 7208.10, 
7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40, 7208.51, 7208.52, 
7208.53, 7208.54, 7208.90, 7211.14, 7211.19, 7225.30, 7225.40, 7225.99, 7226.91 and 
7226.99.  
2  NOTIFICATIO N UNDER ARTICLE 12.1 (B) AND (C)  
Pursuant t o Article 12.1(b) of the Agreement on Safeguards, the Government of South Africa 
hereby gives notification upon making a finding of serious injury caused by increased imports of 
certain flat -rolled products of iron, non -alloy steel or other alloy steel (no t including stainless 
steel), whether or not in coils (including products cut -to-length and 'narrow strip '), not further G/SG/N/8 /ZAF/3/Suppl.1 • G/SG/N/10/ZAF/3 • G/SG/N/11/ZAF/3  
 
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  worked than hot -rolled (hot -rolled flat), not clad, plated or coated, excluding grain -oriented silicon 
electrical steel.  
Pursuant to Ar ticle 12.1(c)  of the Agreement on Safeguards, the Government of South Africa 
hereby gives notification upon taking a decision to apply a safeguard measure on imports of 
certain flat -rolled products of iron, non -alloy steel or other alloy steel (not includi ng stainless 
steel), whether or not in coils (including products cut -to-length and 'narrow strip '), not further 
worked than hot -rolled (hot -rolled flat), not clad, plated or coated, excluding grain -oriented silicon 
electrical steel.  
3  PROVIDE THE BASIS FOR:  
(i) Making a finding of serious injury caused by increased imports, as provided for in 
Article  12.1(a);  
(ii) Taking a decision to apply a safeguard measure, as provided for in Article 12.1(b); and  
(iii) Specifying the developing countries to which the mea sure is not applied under Article 9.1 of 
the Agreement of Safeguards.  
The International Trade Administration Commission of South African initiated an investigation 
pursuant to an application by South African Iron and Steel Institute (the Applicant), on beh alf of 
the SACU industry in order to determine whether increased imports have caused serious injury to 
the domestic industry, within the meaning of the Agreement on Safeguards, in connection with 
certain flat -rolled products of iron, non -alloy steel or oth er alloy steel (not including stainless 
steel), whether or not in coils (including products cut -to-length and 'narrow strip '), not further 
worked than hot -rolled (hot -rolled flat), not  clad, plated or coated, excluding grain -oriented silicon 
electrical ste el. 
3.1  The Commission made a final determination on the following:  
a. Unforeseen Developments  
The Commission made a final determination on obligations incurred post 1994 with regard to the 
imported products and the effects of such obligations:  
 The Commission mad e a final determination that the SA government committed to bind 
the ordinary customs duty on the imported products of flat hot rolled steel at 10% ad 
valorem. The effects of these obligations were that the industry went through a 
restructuring that saw th e state owned entity unbundled and privatised and the 
government facilitated the end or review of an old pricing model to improve the 
competitiveness of the industry. As such various measures have been taken to 
encourage competitiveness and sustainability of the industry.  
The Commission made a final determination on the following unforeseen developments:  
 The unprecedented steep rate of increase in steel production capacity (including the 
subject products) over the ensuing two decades (more than doubled sinc e 1994) to 
support growing construction and manufacturing activity, as well as to help build 
infrastructure, particularly in emerging economies;  
 The significant market downturns in emerging (and other) economies and the resultant 
contraction of demand for steel that contribute to the imbalance between capacity and 
demand, that is, the global oversupply of steel (including the subject products);  
 Record export volumes by countries with excess capacity, fuelled by excess steel supply;  
 Given the global nature o f the steel industry, excess capacity in one region can 
potentially displace production in other regions, thus harming producers in those 
markets. This has already led to several trade actions by major steel markets. Recent 
trade measures by those countrie s are a result of all the above named unforeseen 
developments, and the fact that their markets are now protected, contracts the global G/SG/N/8/ZAF/3/Suppl.1 • G/SG/N/10/ZAF/3 • G/SG/N/11/ZAF/3  
 
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  demand for steel even further, exasperating the problem of increased imports into 
the SACU;  
 The oversupply of steel (incl uding the subject products) has led to a deterioration in the 
financial situation of steelmakers globally and also the SACU. The excess capacity is 
considered as one of the main challenges facing the global steel sector today; and  
 Despite slowing demand g rowth and the existing excess capacity, there are several new 
investment projects underway and planned (especially in current net -importing 
countries) in the steel industry that will result in global steelmaking capacity to continue 
to expand and causing t he SACU to expect further increases of imports of the subject 
products.  
b. Increased Imports  
In comparing the full year periods for 2012 to 2014 in absolute terms, imports increased by 127% 
from 2012 to 2013, thereafter declined by 24% from 2013 to 2014, and throughout the period of 
investigation (2012 to 2014) imports increased by 73%. For the same period, imports relative to 
production increased by increased by 153 index points between 2012 to 2013, declined by 72 
index points between 2013 to 2014, represent ing an overall increase on 81 index points from 2012 
to 2014.  
In comparing the 7 months (January – July) periods for 2012 to 2015 in absolute terms, imports 
increased by 125% between 2012 and 2013 thereafter decrease by 33% between 2013 and 2014, 
from 2014  to 2015 they increased by 76%. Over the period of investigation 2012 to 2015, there 
was an overall increase of 166% in imports. For the same period, imports relative to production 
increased by 162 index points from 2012 to  2013, decreased by 62 index poin ts from 2013 
to 2014, thereafter an increase of 139 index points from 2014 to 2015, representing an increase of 
208 index points from 2012 to 2015.  
The Commission made a  final determination that recent, sudden, sharp and significant increase of 
the imports  of the imported products occurred in the period 2012 to 2013 full year and 7 months 
periods, and the subject product continued to be imported in increased quantities both in absolute 
terms and relative to production.  
The Commission made a final determinat ion that these events cited were unforeseen 
developments which led to the imported product being imported into the SACU market in such 
increased quantities and under such conditions to cause serious injury to domestic producers of 
the SACU like product or directly competitive products.  
c. Serious Injury  
The period of investigation for data evaluation for the purposes of determining the allegation of 
serious injury  is 01 January 2012 to 31 December 2014 plus additional seven months information 
for 2012 to 2015 (01 January to 31 July).  
The injury analysis relates to information submitted by ArcelorMittal South Africa Limited 
(AMSA 's), a member of SAISI with a collective output of the like or directly competitive products 
constituting a major proportion (approxim ately more than 70%) of the total domestic production 
of those products.  
There is sufficient evidence that the SACU industry is suffering injury in the form of a decline in 
sales volumes, output, market share, utilisation of capacity and employment for th e period 
1 January 2012 to 31 December 2014. There is also sufficient evidence that the SACU industry is 
suffering injury in the form of a decline in sales volumes, output, market share, and utilisation of 
capacity for the seven months period 1 January to 31 July (2012 – 2015).  
The Commission made a final determination that the SACU indust ry is suffering serious injury.  
d. Causal Link between  Increased Import and Serious Injury  
The Commission made a final determination that there is sufficient evidence of seri ous injury to 
the domestic industry caused by the sudden enough, sharp enough, recent enough, and significant G/SG/N/8 /ZAF/3/Suppl.1 • G/SG/N/10/ZAF/3 • G/SG/N/11/ZAF/3  
 
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  enough increase in the volume of imports. There are no other known factors other than the 
increased imports that sufficiently detract from this ca usal link.  
e.  Adjustment  Plan  
The domestic industry has submitted an adjustment plan, outlining the measures it has taken and 
those it plans to take for facilitation of adjustment of the domestic industry to the competiti ve 
conditions with the imports.  
f. Offer of consultations under Article 12.3  
The Government of South Africa offers consultations on the definitive safeguard measures.  
3.2  Provide a precise description of the proposed measure  
A definitive measure of 12% on the imports of  certain flat -rolled products  of iron, non -alloy steel 
or other alloy steel (not including stainless steel), whether or not in coils (including products cut -
to-length and 'narrow strip '), not further worked than hot -rolled (hot -rolled flat), not  clad, plated 
or coated, excluding grain -oriented silicon electrical steel , imported under tariff subheading 
7208.10, 7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40, 7208.51, 
7208.52, 7208.53, 7208.54, 7208.90, 7211.14, 7211.19, 7225.30, 7225.40, 7225.99, 7226.91 
and 7226 .99. 
3.3  Provide the proposed date of introduction of the measure  
It is expected that the definitive measure, if adopted, will come into effect between June 2017 and 
July 2017.  
3.4  Provide the expected duration of the measure  
The safeguard measure, if adopted, wil l remain in force for 3 years.  
3.5  For a measure with a duration of more than three years, provide the proposed date 
for the review (under Article 7.4) to be held not later than the mid -term of the measure, 
if such date for the review has already been schedule d 
Not applicable.  
3.6  If the expected duration is over one year, provide the expected timetable for 
progressive liberalization of the measure  
Period  Rate of safeguard measure  
07 July 2017 - 06 July 2018  12% 
07 July 2018 - 06 July 2019  10% 
07 July 2019 - 06 July 2020  8% 
3.7  If the measure is being extended, also provide: (i) evidence that the industry 
concerned is adjusting and that the safeguard measure continues to be necessary to 
prevent or remedy serious injury  
Not applicable.  
4  NOTIFICATION UNDER A RTICLE 9, F OOTNOTE 2  
4.1  Specify the measure  
The measure consists of 12% described in the notification under Article 12.1(c), above.  
4.2  Specify the products subject to the measure  
The measure shall be applied to the products described above, in paragraph 1 of this notificat ion.  G/SG/N/8/ZAF/3/Suppl.1 • G/SG/N/10/ZAF/3 • G/SG/N/11/ZAF/3  
 
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  4.3  Specify the developing countries to which the measure is not applied under 
Article  9.1 of the Agreement on Safeguards  
Country  Country  Country  
Afghanistan  Guatemala  Panama  
Albania  Guinea  Papua New Guinea  
Algeria  Guinea -Bissau  Paraguay  
American Sam oa Guyana  Peru 
Angola  Haiti Philippines  
Argentina  Honduras  Romania  
Armenia  Indonesia  Russian Federation  
Azerbaijan  Iran, Islamic Rep. of  Rwanda  
Bangladesh  Iraq Samoa  
Belarus  Jamaica  Sao Tome and Principe  
Belize  Jordan  Senegal  
Benin  Kazakhstan  Serbia 
Bhutan  Kenya  Seychelles  
Bolivia (Plurinational State of)  Kiribati  Sierra Leone  
Bosnia and Herzegovina  Korea, Democ. P. Rep. of  Solomon Islands  
Botswana  Kosovo  Somalia  
Brazil  Kyrgyz Republic  South Sudan  
Bulgaria  Lao People's Democ. Rep.  Sri Lanka  
Burkina Faso  Latvia  St. Kitts and Nevis  
Burundi  Lebanon  St. Lucia  
Cambodia  Lesotho  St. Vincent and the Grenadines  
Cameroon  Liberia  Sudan  
Cape Verde  Libya Suriname  
Central African Republic  Lithuania  Swaziland  
Chad Macedonia, the F.Y.R. of  Syrian Arab R epublic  
Chile Madagascar  Tajikistan  
Chinese Taipei  Malawi  Tanzania, United Republic of  
Colombia  Malaysia  Thailand  
Comoros  Maldives  Timor -Leste  
Congo, Democ. Republic of the  Mali Togo 
Congo, Rep.  Marshall Islands  Tonga  
Costa Rica  Mauritania  Tunisia  
Côte d'Ivoire  Mauritius  Turkey  
Cuba Mexico  Turkmenistan  
Djibouti  Micronesia, Fed. States of  Tuvalu  
Dominica  Moldova  Uganda  
Dominican Republic  Mongolia  Ukraine  
Ecuador  Montenegro  Uruguay  
Egypt, Arab Rep.  Morocco  Uzbekistan  
El Salvador  Mozambique  Vanuatu 
Eritrea  Myanmar  Venezuela, (Bolivarian Republic of)  
Ethiopia  Namibia  Vietnam  
Fiji Nepal  West Bank and Gaza  
Gabon  Nicaragua  Yemen  
Gambia, The  Niger  Zambia  
Georgia  Nigeria  Zimbabwe  
Ghana  Pakistan   
Grenada  Palau   
 
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