G/SG/N/6/ZAF/5  
 
1 August 2016  
(16-4099)  Page: 1/3  
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON SAFEGUARDS 
ON INITIATION OF AN INVESTIGATION AND THE REASONS FOR IT 
SOUTH AFRICA 
(Flat-rolled products of iron or non-alloy steel) 
 
The following communication, dated 29 July 2016, is being circulated at the request of the 
Delegation of South Africa. 
 
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Pursuant to Article 12.1(a) of the Agreement on Sa feguards, South Africa hereby gives notification 
of the initiation of a safeguard investigation into the surge of 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 fu rther worked than cold-rolled (cold-reduced), 
hereinafter referred to as "cold-rolled steel products." 
 
1.  THE DATE WHEN THE IN VESTIGATION WAS INITIATED 
The investigation was initiated on 29 July 2016. The notice of initiation by the investigating 
authority was published through notice No. 469 in Government Gazette  No. 40171 on 
29 July 2016. 
 2.  THE PRODUCT SUBJEC T TO THE INVESTIGATION 
The subject product is described as 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 further worked than cold-rolled (c old-reduced) imported under the following tariff 
headings: 7209.15, 7209.16, 7209.17, 7209.18, 7225.50 and 7226.92. 
 3.  THE REASONS FOR THE INITIATION OF INVESTIGATION 
i. The application was lodged by the South African Iron and Steel Institute (SAISI), a 
non-governmental representative organization serving the collective interests of the 
primary steel industry in South Africa (the Applicant) on behalf of ArcelorMittal South Africa (AMSA), the major producer of cold-rolled steel products (the subject 
product), representing the SACU industry. 
The claim is that the subject product is bein g imported into the SACU market in such 
increasing quantities in absolute terms and relative to SACU production and under 
such conditions, to be causing serious injury to the SACU industry.   
 
ii. Prima facie information on which the investigation was initiated: 
The Commission found that the Applicant submitted prima facie  information to 
indicate a sharp, sudden, recent and significant increase in imports of flat-rolled 
products of iron or non-alloy steel, or other alloy steel but excluding stainless steel, G/SG/N/6/ZAF/5 
 
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  of all widths, cold-rolled (cold-reduced), not clad, plated or coated and not further 
worked than cold-rolled (cold-reduced) during the period of investigation. 
 4.  SERIOUS INJURY AND CAUSAL LINK 
The period of investigation for data evaluation for the purposes of determining the allegation of 
serious injury is 01 January 2012 to 31 December 2015.   
The injury analysis relates to information submitted by AMSA the major producer of the subject 
products in the SACU.   The Applicant alleged and submitted prima facie information indicating that it is experiencing 
serious injury in the form of a decline in sale s volumes, output, market share, productivity, 
utilisation of capacity and employment for the period 1 January 2012 to 31 December 2015. AMSA also experienced net losses during the period of investigation.  
 
5.  UNFORESEEN DEVELOPMENTS 
The Applicant submitted that a confluence of  events forms the basis of the unforeseen 
development that supports this application. That is, ultimately the considerable oversupply of 
steel, and specifically the subject products, in the world today causing a surge in the volumes of imports into the SACU.   
The Applicant stated that during the Uruguay Round  of negotiations, South Africa did not foresee 
the following events:  
 The unprecedented steep rate of increase in st eel 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 contri bute 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 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 name d 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 oversupply 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  
 
 Despite slowing demand growth and the exis ting 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 decided that the Applicant submitted prima facie  information to indicate that 
there were unforeseen developments and that th ese unforeseen developments and the effect of 
the obligations incurred under the GATT 1994, led to the increased volume of imports.  
 
6.  FURTHER INFORMATION 
Interested parties must make themselves known within a period of 20 days after the initiation of 
the investigation. 
 G/SG/N/6/ZAF/5 
 
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  Any information which the interested parties may wish to submit in writing and any request for a 
hearing before the Commission that they may wish to put forward should be submitted within 20 days following the initiation of this investigation to the Directorate: Trade Remedies I at the following address: The DTI Campus, 77 Meintjies Street, Sunnyside Pretoria, Block Uuzaji, Ground 
Floor, Tel: +27 12 394 3600, fax +27 12 394 0518. 
 If part of the information provided is of a confidential nature, the party concerned should give the 
grounds justifying confidentiality and furnish public summaries of such information, which should 
be as detailed as possible. In instances that a public summary cannot be provided a sworn statement must be provided stating the reasons why the information cannot be summarized. This requirement is designed to secure transparen cy and due access by all the parties to the 
information relating to this investigation. If the summaries are not duly provided and in the 
absence of just cause, ITAC may disregard the information deemed to be confidential. 
 
 
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