G/SG/N/8/ZAF/4  
 
7 November 2016 
(16-6096) Page: 1/3 
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT ON  
SAFEGUARDS ON FIN DING A SERIOUS INJUR Y OR THREAT  
THEREOF CAUSED BY IN CREASED IMPORTS  
 SOUTH AFRICA  
Flat-rolled products of iron or non-alloy steel, or  
other alloy steel but excluding stainless steel  
The following communication, dated 4 November 2016, is being ci rculated at the request of the 
Delegation of South Africa .1 
 
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Pursuant to Article 12.1(b) of the Agreement on Safeguards, the Government of South Africa 
hereby gives notificatio n upon making a finding of serious injury caused by increased imports of 
flat-rolled products of iron or non -alloy steel, or other alloy steel but excluding stainless steel, of 
all widths, cold -rolled (cold -reduced), not clad, plated or coated and not furt her worked than 
cold-rolled (cold -reduced), hereinafter referred to as "cold-rolled steel products ". 
1  THE PRODUCT SUBJECT TO THE INVESTIGATION  
The subject product is described as flat-rolled products of iron or non -alloy steel, or other alloy 
steel but excl uding stainless steel, of all widths, cold -rolled (cold -reduced), not clad, plated or 
coated and not further worked than cold -rolled (cold -reduced),  imported under tariff 
subheadings  7209.15, 7209.16, 7209.17, 7209.18, 7225.50 and 7226.92.  
2  PROVIDE THE BASI S FOR:  
Making a preliminary determination, as provided for in Article 6, that increased imports have 
caused serious injury.  
The International Trade Administration Commission of South African initiated an investigation 
pursuant to an application by South Af rican Iron and Steel Institute, 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 
flat-rolled products o f iron or non -alloy steel, or other alloy steel but excluding stainless steel, of 
all widths, cold -rolled (cold -reduced), not clad, plated or coated and not further worked than 
cold-rolled (cold -reduced).  
                                                
1 Copy of the Government G azette and of the Preliminary Report have been submitted electronically. 
To consult these documents, please contact Ms Budd (hilary.budd@wto.org) or Ms Naville 
(delphine.naville@wto.org) of the Rules Division.  G/SG/N/8/ZAF/4  
 
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  The Commission made a preliminary determination on the following:  
(a) Unforeseen Developments  
The Commission made a preliminary determination on the following unforeseen developments:  
 The unprecedented steep rate of increase in steel production capacity;  
 The significant market downturns in emerging (and other ) economies resulting in 
contraction of demand for steel;  
 Record export volumes by countries with excess capacity, fuelled by excess steel supply;  
 Recent trade measures by other countries worsen the situation of increased imports into 
the SACU where there  are no trade measures in place;  
 The oversupply of steel (including the subject products) has led to a deterioration in the 
financial situation of steelmakers globally and also the SACU; and  
 Despite 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 expand and causing the SACU to expect further increases of imports of the subject 
products.  
The Commission considered that the SA government committed to bind the ordinary customs duty 
on the imported products of cold -rolled steel products 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 
encou rage competitiveness and sustainability of the industry.  
(b) Increased Imports  
The data evaluation for the purposes of determining increa sed imports covered the period 
1 January 2012 to 31 December 2015.  
The Commission considered that the subject product is b eing imported into the SACU market in 
such increasing quantities in absolute terms and relative to SACU production.  
The Commission made a preliminary determination that recent, sudden, sharp and significant 
increase of the imports of the imported products occurred in the period 2012 to 2013 and the 
subject product continued to be imported in increased quantities both in absolute terms and 
relative to production.  
(c) Serious Injury  
The data evaluation for the purposes of determining serious injury covered the pe riod 
1 January  2012 to 31 December 2015.   
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 prop ortion (approximately more than 80%) 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, losses, productivity and capi tal utilization, and employment 
for the period 1 January 2012 to 31 December 2015.  G/SG/N/8/ZAF/4  
 
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  The Commission made a preliminary determination that the SACU industry is suffering serious 
injury.  
(d) Causal Link between Increased Import and Serious Injury  
The Commission m ade a preliminary determination that although there are factors other than the 
imports that contributed to the injury, such as the increase in the cost of raw material, auxiliaries 
and consumables, manpower and maintenance; these factors did not sufficient ly detract from the 
causal link between the serious injury suffered by the Applicant and the surge in volumes of 
imports resulting from the unforeseen developments.  
(e) Preliminary determination  
The Commission decided that there:  
 are unforeseen developmen ts 
 is a surge  
 is serious injury caused by increased imports  
The Commission made a preliminary determination  not to request the Commissioner for 
South  African Revenue Service (SARS) to impose a provisional payment.  
 
 
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