G/SG/N/8/ZAF/3/Suppl.2  
G/SG/N/10/ZAF/3/Suppl.1  
G/SG/N/11/ZAF/3/Suppl.1  
 
17 August  2017 
(17-4416) Page: 1/6 
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 ) 
Supplement  
The following communication, dated 16 August  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 pro posed safeguard 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 product s.  
 
On 18 July 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 determinati on has been notified 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 su bject product is described as certain flat -rolled products of iron, non -alloy steel or other 
alloy s teel (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 , impor ted 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.  
 G/SG/N/8/ZAF/3/Suppl.2 • G/SG/N/10/ZAF/3/Suppl.1 • G/SG/N/11/ZAF/3/Suppl.1  
 
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  2  NOTIFICATIO N UNDER ARTICLE 12.1 (B) AND (C)  
Pursuant to 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 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. 
 
Pursuant to Article 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 allo y 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.  
 
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 t he measure 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 behalf 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 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 
electr ical steel.  
 
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 Com mission made 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 the 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 sust ainability 
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 since 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;  
 G/SG/N/8/ZAF/3/Suppl.2 • G/SG/N/10/ZAF/3/Suppl.1 • G/SG/N/11/ZAF/3/Suppl.1  
 
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   Given th e global nature of 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 countries are a result of all the above named unforeseen developments, and the fact 
that their markets are now protected, contracts the global demand for steel even further, 
exasperating the problem of increased imports into the SACU;  
 The oversupp ly of steel (including 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  
 
 Despit e slowing demand growth 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 ex pand 
and causing the 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% fro m 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 201 3 to 2014, representing 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 201 3 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, decre ased by 62  index points 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 determination 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 inf ormation 
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 (approximately 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 ca pacity and employment for the 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 industry is suffering serious injury.  
 G/SG/N/8/ZAF/3/Suppl.2 • G/SG/N/10/ZAF/3/Suppl.1 • G/SG/N/11/ZAF/3/Suppl.1  
 
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  (d) Causal Link between Increased Import and Serious Injury  
 
The Commission made a final determination that the re is sufficient evidence of serious injury to 
the domestic industry caused by the sudden enough, sharp enough, recent enough, and significant 
enough increase in the volume of imports. There are no other known factors other than the 
increased imports that sufficiently detract from this causal 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 competitiv e 
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, 722 5.30, 7225.40, 7225.99, 7226.91 
and 7226.99.  
 
3.3  Provide the expected duration of the measure  
The safeguard measure, will remain in force for 3 years.  
 
3.4  For a measure with a duration of more than three years, provide the proposed date 
for the review (under Art icle 7.4) to be held not later than the mid -term of the measure, 
if such date for the review has already been scheduled  
Not applicable.  
 
3.5  If the expected duration is over one year, provide the expected timetable for 
progressive liberalization of the measure  
Period  Rate of safeguard measure  
11 August 2017 – 10 August 2018  12% 
11 August 2018 – 10 August 2019  10% 
11 August 2019 – 10 August 2020  8% 
 
3.6  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, FOOTNOTE 2  
4.1  Specify the measure  
The measure consists of 12% described in the notification under Article 12.1(c), above.  
 
4.2  Spec ify the products subject to the measure  
The measure shall be applied to the products described above, in paragraph 1 of this notification.  
 G/SG/N/8/ZAF/3/Suppl.2 • G/SG/N/10/ZAF/3/Suppl.1 • G/SG/N/11/ZAF/3/Suppl.1  
 
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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 Safeguar ds 
Country  Country  Country  
Afghanistan  Guinea  Panama  
Albania  Guinea -Bissau  Papua New Guinea  
Algeria  Guyana  Paraguay  
American Samoa  Haiti Peru 
Angola  Honduras  Philippines  
Argentina   Romania  
Armenia  Indonesia  Russian Federation  
Azerbaijan  Iran, Islam ic 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. o f Solomon Islands  
Botswana  Kosovo  Somalia  
Brazil  Kyrgyz Republic   
Bulgaria  Lao People's Democ. Rep.  South Sudan  
Burkina Faso  Latvia  Sri Lanka  
Burundi  Lebanon  St. Kitts and Nevis  
Cambodia  Lesotho  St. Lucia  
Cameroon  Liberia  St. Vincent and the 
Grenadi nes 
Cape Verde  Libya Sudan  
Central African Republic  Lithuania  Suriname  
Chad Macedonia,  the F.Y.R. of  Swaziland  
Chile Madagascar  Syrian Arab Republic  
Chinese Taipei (Taiwan)  Malawi  Tajikistan  
Colombia  Malaysia  Tanzania, United Republic of  
Comoros  Maldives Thailand  
Congo, Democ.  
Republic of the  Mali Timor -Leste  
Congo, Rep.  Marshall Islands  Togo G/SG/N/8/ZAF/3/Suppl.2 • G/SG/N/10/ZAF/3/Suppl.1 • G/SG/N/11/ZAF/3/Suppl.1  
 
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  Country  Country  Country  
Costa Rica  Mauritania  Tonga  
Côte d'Ivoire  Mauritius  Tunisia  
Cuba Mexico  Turkey  
Djibouti  Micronesia,  Fed. States of  Turkmenistan  
Dominica  Moldova  Tuvalu  
Dominican Republic  Mongolia  Uganda  
Ecuador  Montenegro  Ukraine  
Egypt, Arab Rep.  Morocco  Uruguay  
El Salvador  Mozambique  Uzbekistan  
Eritrea  Myanmar  Vanuatu  
Ethiopia  Namibia  Venezuela, (Bolivarian 
Republic of)  
Fiji Nepal  Vietnam  
Gabon  Nicaragua  West Ba nk and Gaza  
Gambia, The  Niger  Yemen  
Georgia  Nigeria  Zambia  
Ghana  Pakistan  Zimbabwe  
Grenada  Palau   
Guatemala    
 
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