G/SG/N/7/ZAF/4  
G/SG/N/11/ZAF/5  
 
11 July 2019  
(19-4596) Page: 1/4 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.4 OF THE A GREEMENT  
ON SAFEGUARD S BEFORE TAKING A PRO VISIONAL  
SAFEGUARD MEASURE RE FERRED  
TO IN ARTICLE 6  
 
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2,  
OF THE AGREEMENT ON SA FEGUARDS  
SOUTH AFRICA 
(Threaded fasteners of iron or steel ) 
The following communication, dated 8 July 2019, is being ci rculated at the request of the D elegation 
of South  Africa . 
 
_______________  
 
 
Pursuant to Article 12.4 of the Agreeme nt on Safeguards the Government of  South Africa hereby 
gives notification before taking provisional safeguards measures on imports of threaded fasteners of 
iron or steel : bolt ends & screw studs, screw studding and other hexagon nuts (excluding those of 
stainless steel and those identifiable for aircraft) . 
 
Pursuant to Article 9, footnote 2 of the Agreement on Safeguards, the Government of South Africa 
hereby gives notification on a decision not to apply provisional measures on imports from developing 
countries.  
 
1. Description of the product  
The subject product is described as bolt ends & screw studs (classifiable under tariff subheading 
7318.15.41), screw studding (classifiable under tariff subheading 7318.15.42) and other hexagon 
nuts (classifiable under tariff subheading 7318.16.30) of iron and steel (excluding those of stainless 
steel and those identifiable for aircraft).  
 
2. The provisional safeguard measure  
The provisional safeguard measure consists of an ad valorem  Safeguard duty of 102.10%.  
 
3. The proposed date of imposition of the safeguard measure  
The proposed date of imposition is 19 July 2019.  
 
4. The expected duration of the provisional safeguard measure  
The expected duration is two hundred (200) days.  
 G/SG/N/7/ZAF/4 • G/SG/N/11/ZAF/5  
 
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  5. Provide the basis for:  
(i) 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 the South African Iron and Steel Institute (the Applicant), on behalf of 
the South African Fasteners Manufacturers ' Association (SAFMA) in  order to determine whether 
increased imports have caused serious injury to the domestic industry, within the meaning of the 
Agreement on Saf eguards  in connection with  threaded fasteners of iron or steel : bolt ends & screw 
studs, screw studding and other hexagon nuts (excluding those of stainless steel and those 
identifiable for aircraft).  
 
(a) Unforeseen Developments  
 
• The unprecedented steep rate of increase in global fastener production capacity which was 
mainly fuelled by the growth of the Chinese and Asian fastener market;  
• The growth of the Chinese fastener market which was driven by such steep increase in 
productio n of fasteners and such steep increase in fastener export volumes;  
• The economic slowdown of the Chinese economy and the global contraction in demand. The 
economic slowdown of Chinese economy and the financial crisis of 2008 to 2010 had an 
impact on the dem and for fasteners and with increased production created an imbalance 
between supply and demand which added to increased export volumes;  
• The significant unused production capacity of carbon steel fasteners in China, and;  
• an increase in trade remedy actions  taken against fastener products (including the subject 
product) by countries such as Canada and the United States of America.  
 
The Commission considered that the South Africa government committed to bind the ordinary 
customs duty on the imported products of bolt ends & screw studs, screw studding and other 
hexagon nuts (excluding those of stainless steel and those identifiable for aircraft) at  30% 
ad varolem.   
 
(b) Increased imports  
 
The data evaluation for the purposes of determining increased imports covered the period from 01 
July 2014 to 30 June 2018. The Commission considered that imports of bolt ends & screw studs, 
screw studding increased during the period considered. A surge in  imports was experienced 
in 2016/17. Although imports decreased in 2017/18 they remained at higher levels than 2014/15 
and 2015/16 and therefore continued to increase at such high levels. Imports relative to production 
decreased in 2017/18 as domestic indu stry's production increased following the steep increase in 
imports relative to production in 2016/17.  
 
With regard to other hexagon nuts, there was unprecedented increase in imports throughout the 
period considered with a surge noted in 2016/17 and conti nuing in 2017/18. The hexagon nuts were 
imported in such 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 period from 
01 July 2014 to 30 June 2018. The injury analysis of bolt ends & screw studs, screw studding  relates 
to information submitted by T&I Chalmers Engineering (Pty) Ltd a member of South African 
Fasteners Manufacturers ' Association (SAFMA) with a collective output of t he like or directly 
competitive products constituting a major proportion (more than 50%) of the total domestic 
production. There is sufficient evidence that the SACU industry on bolt ends & screw studs, screw 
studding experienced a decline in sales volumes , market share, gross profits and negative net profits 
during the period 01 July 2014 to 30 June 2018 as a result of increased imports.  
 
The injury analysis of other hexagon nuts relates to information submitted by CBC Fasteners (Pty) 
Ltd; SA Bolt Manufact urers (Pty) Ltd; Transvaal Pressed Nuts, Bolts & Rivets (Pty) Ltd; members of 
South African Fasteners Manufacturers ' Association (SAFMA) with a collective output of the like or 
directly competitive products constituting a major proportion (approximately mo re than 90%) of the 
total domestic production. There is sufficient evidence that the SACU industry on other hexagon nuts G/SG/N/7/ZAF/4 • G/SG/N/11/ZAF/5  
 
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  is suffered a decline in market share, output, productivity, gross profits; negative net profits and 
low capacity utilisation.  
 
(d) Causal  link between Increased Imports and Serious Injury  
 
A surge in imports of threaded rods occurred in 2016/17 which caused serious injury to the SACU 
industry. The applicant lost market share during the period considered while the share of imports in 
the mar ket increased. The loss of market share by the applicant was highest 2016/17 which 
coincided with the biggest gain in market share by the imports. With hexagon nuts,  the applicant 's 
lost market share during the period of investigation . During the period of  investigation, the 
applicant 's market share for hexagon nuts decreased while the market share of imports increased.  
 
The other factors that were considered to have caused injury included cost structures, lack of export 
opportunities, domestic industry ow n imports of the subject product, restructuring of the domestic 
industry, labour unrest, raw material supply difficulties and exchange rate fluctuations. It was found 
that these factors did not sufficiently detract from the causal link between increased im ports and 
serious injury.  
 
The Commission made a preliminary determination that there 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 seriou s injury to domestic producers of the SACU like product or 
directly competitive products.  There are no other known factors that sufficiently detract from the 
causal link.  
 
(ii) Determining that there are critical circumstances where delay would cause damage 
which it would be difficult to repair.  
 
The Commission considered that increased imports of subject products caused serious injury to 
SACU industry. While there were noticed improvements in some areas of the domestic industry 's 
performance during the period of investigation it is considered unsustainable for the industry given 
the pressure from imports which are still in such increased quantities. These may even be reversed 
and cause further damage if the domestic industry is n ot immediately protected given the imports 
are coming into SACU at such high levels and hold a bigger share of the market.  
 
6.1 Major exporting countries  
The Government of South Africa offers consultations on the provisional measures  under Article 12.4.  
 
6.2 Developing countries  
Below is the list of developing countries excluded from measures as they exported less than 3 % of 
total imports to South Africa (Article 9.1 of the Agreement on Safeguards):  
DEVELOPING COUNTRIES TO BE EXCLUDED FROM THE DUTY  
Afghanistan  Madagascar  
Albania  Malawi  
Algeria  Latvia  
American Samoa  Lebanon  
Angola  Maldives  
Antigua and Barbuda  Mali 
Argentina  Marshall Islands  
Armenia  Mauritania  
Azerbaijan  Mauritius  
Bangladesh  Mexico  
Bahrain, Kingdom of  Micronesia, Fed. States of 
Belarus  Moldova, Republic of  
Belize  Mongolia  
Benin  Montenegro  
Bhutan  Morocco  
Brunei Darussalam  Mozambique  
Bolivia, Plur . State of  Myanmar  
Bosnia and Herzegovina  Namibia  G/SG/N/7/ZAF/4 • G/SG/N/11/ZAF/5  
 
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  Botswana  Nepal  
Brazil  Nicaragua  
Bulgaria  Niger  
Burkina Faso  Nigeria  
Burundi  North Macedonia  
Cabo Verde  Oman  
Cambodia  Pakistan  
Cameroon  Palestine  
Central African Republic  Palau  
Chad Panama  
Chile Papua New Guinea  
Colombia  Paraguay  
Comoros  Peru 
Costa Rica  Philippines  
Côte d 'Ivoire  Qatar  
Cuba Romania  
Democratic Republic of the Congo  Russian Federation  
Congo Republic  Rwanda  
Djibouti  Saudi Arabia, Kingdom of  
Dominica  St. Kitts and Nevis  
Dominican Republic  St. Lucia  
Ecuador  Saint Vincent and the Grenadines  
Egypt, Arab Rep.  Sao Tome and Principe  
El Salvador  Samoa  
Eritrea  Senegal  
Eswatini  Seychelles  
Equatorial Guinea  Sierra Leone  
Ethiopia  Singapore  
Fiji Solomon Islands  
Gabon  Serbia  
The Gambia  Somalia  
Georgia  South Sudan  
Ghana  Sri Lanka  
Grenada  Sudan  
Guatemala  Suriname  
Guinea  Syrian Arab Republic  
Guinea -Bissau  Tajikistan  
Guyana  Tanzania  
Haiti Timor -Leste  
Honduras  Togo 
India Thailand  
Indonesia  Tonga  
Iran, Islamic Rep. of  Trinidad and Tobago  
Iraq Tunisia  
Jamaica  Turkey  
Jordan  Turkmenistan  
Kazakhstan  Tuvalu  
Kenya  Uganda  
Kiribati  Ukraine  
Korea, Democ. P. Republic of  United Arab Emirates  
Kyrgyz Republic  Uruguay  
Kosovo  Uzbekistan  
Kuwait, the State of  Vietnam  
Lao People 's Dem. Republic  Vanuatu  
Lebanon  Venezuela, Bolivarian Republic of  
Lesotho  West Bank and Gaza*)  
Liberia  Yemen  
Libya  Zambia  
Lithuania  Zimbabwe  
 
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