G/SG/N/7/ZAF/3  
G/SG/N/11/ZAF/4  
 
1 August 2018 
(18-4874) Page: 1/4 
Committee on Safeguards  Original:  English  
 
NOTIFICATION UNDER A RTICLE 12.4 OF THE A GREEMENT  
ON SAFEGUARD BEFORE TAKING A PROVISIONAL  
SAFEGUARD MEASURE RE FERRED  
TO IN ARTICLE 6  
 
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2,  
OF THE AGREEMENT ON SAF EGUARDS  
SOUTH AFRICA 
(Other screws fully threaded with hexagon heads made of steel ) 
The following communication, dated 30 July 2018, is being ci rculated at the request of the 
Delegation of South  Africa . 
 
_______________  
Pursuant to Arti cle 12.4 of the Agreement on safeguards, the Government of  South Africa hereby 
gives notification before taking provisional safeguards measures for imports of other screws fully 
threaded with hexagon heads made of steel; and a notification pursuant to Article 9, footnote 2 of 
the Agreement on Safeguards, on taking  a decision not to apply those measures to imports from 
developing countries.  
 
1. The product subject to the investigation  
 
The subject product is described as other screws fully threaded with hexagon heads made of 
steel, classifiable under tariff subheading 7318.15.39.  
 
2. The provisional safeguard measure  
 
The provisional safeguard measure consists of ad valorem  Safeguard duty of 42.09 per cent.  
 
3. The proposed date of imposition of the safeguard measure  
The provisional safeguard measure is proposed to be imposed  on 3 August 2018.  
4. The expected duration of the provisional safeguard measure, if any decision on the 
duration of the measure has been made  
Two hundred (200) days.  
5. Provide the basis for:  
(i) making a preliminary determination, as provided for in Article 6,  that increased 
imports have caused serious injury ; and,  
(ii) determining that there are critical circumstances where delay would cause damage 
which it would be difficult to repair.  
 G/SG/N/7/ZAF/3 • G/SG/N/11/ZAF/4  
 
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  The International Trade Administration Commission of South African initiated an 
investigation pursuant to an application by the South African Iron and Steel Institute 
("SAISI " or the "Applicant "), on behalf of the SACU industry in order to determine whethe r 
increased imports have caused serious injury to the domestic industry, within the meaning 
of the Agreement on Safeguards, in connection with other screws fully threaded with 
hexagon heads made of steel.  
  
The preliminary determinations of the investigati on are that there is sufficient evidence of 
serious injury to the domestic industry caused by increased imports.  
a) Increased Imports: There is sufficient information to indicate that there is a recent, 
sudden, sharp and significant increase in imports.   
The surge in absolute terms began in the period ending June 2013 and it maintained 
its levels in 2014. The rate and amount of increase from July 2012 to June 2013 is 
clearly sudden. The high volumes arising from the surge in the volume of imports were 
maintain ed throughout the period of investigation both in relative terms and absolute 
terms.  
In conclusion, the recent, sudden, sharp and significant increase of the imports of the 
subject product occurred in the period ending in June 2013 to the period ending in 
June 2017 and the subject product continued to be imported in increased quantities 
both in absolute terms and relative to production.  
b) Unforeseen Developments: The unforeseen developments are as follows:  
 The unprecedented steep rate of increase in fastener  production capacity after 
the Uruguay Round of negotiations. This mainly took place to support growing 
construction and manufacturing activity, as well as to help build infrastructure, 
particularly in emerging economies. This growth in global capacity was  mainly 
fuelled by the growth of the Chinese and Asian fastener markets;  
 The significant downturn of the fastener market as a result of the Asian financial 
crisis that contributed to the imbalance between capacity and demand, that is, 
the global oversupply  of fasteners. This led to a significant increase in export 
volumes by countries with excess capacity; and   
 This in turn led to an increase in trade remedy actions being taken on fastener 
products, including set screws, by a number of countries, notably Ca nada and 
the European Union, which are significant export markets for these products. 
Given the fact that fasteners are a commodity product, excess capacity in one 
region can, with relative ease, displace production in other regions, thus 
harming producers  in those regions.  
c) Serious injury: There is sufficient evidence that the SACU industry is suffering serious 
injury in the form of:  
­ Sales volumes;  
­ Net losses;  
­ Output;  
­ Market share;  
­ Utilisation of capacity and  
­ Employment.  
d) Causal link between increased imp ort and serious injury: There is sufficient 
information to indicate that the serious injury experienced by the SACU industry, is 
caused by the recent, sudden, sharp and significant surge in the volume of imports. 
Although there are factors other than the s urge in imports such as  labour strikes, 
inconsistent steel supply and electricity supply constraints ; these factors did not 
sufficiently detract from the causal link between the surge in imports and the serious G/SG/N/7/ZAF/3 • G/SG/N/11/ZAF/4  
 
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  injury experienced by the Applicant, as these  factors were temporary and did not take 
place throughout the period of investigation.  
 
e) Adjustment plan: The domestic industry has submitted an adjustment plan, outlining 
the measures it put in place for facilitating the adjustment of the domestic industr y to 
the competitive conditions with the imports.  
 
f) Critical circumstances: The total imports increased by 145 per cent from the period 
ending June 2013 to the period ending June 2014 and slightly declined by 7 per cent 
from the period 2014 to 2015. However , the increase from the period ending 
June 2013 to period ending June 2017 increased by 163 per cent which is 18 per cent 
more that the surge level in the period ending June 2014.  Notwithstanding the 
increase in the customs duty to 30 per cent ad valorem in March 2017, imports 
continue at levels higher than that in March 2017.  
 
Total imports as a percentage of the SACU industry’s output increased significantly 
during the period of investigation being July 2014 to June 2017.  
 
Impact on the Applicant  
 
1. Sales volumes decreased by 32 index points from 2014 to 2017.  
2. Output  decreased by 30 index points in total production from 2014 to 2017.  
3. Market Share declined by 31 index points from 2014 to 2017.  
4. Net losses remained even though they decreased from 2014 t o 2017.  
5. Employment decreased by 8 index points from 2014 to 2017.  
In view of the above, the Commission found that critical circumstances exist 
justifying the imposition of provisional safeguard duties.  
g) Offer of consultations under Article 12.4: The Government of South Africa offers 
consultations on the provisional measures.  
 
Below is the list of developing countries excluded from measures as they exported less than 3 per 
cent of total imports to South Africa (Article 9.1 of the Agreement on Safeguard s): 
 
LIST OF DEVELOPING C OUNTRIES EXCLUDED  
FROM THE MEASURES  
Country  Country  
Afghanistan  
Albania  
Algeria  
American Samoa  
Angola  
Antigua and Barbuda  
Argentina  
Armenia  
Azerbaijan  
Bangladesh  
Belarus  
Belize  
Benin  
Bhutan  
Bolivia  
Bosnia and Herzegovina  
Brazil  
Bulgaria  Fiji 
Gabon  
Gambia, The  
Georgia  
Ghana  
Grenada  
Guatemala  
Guinea  
Guinea -Bissau 
Guyana  
Haiti 
Honduras  
India 
Indonesia  
Iran, Islamic Rep.  
Iraq 
Jamaica  
Jordan  G/SG/N/7/ZAF/3 • G/SG/N/11/ZAF/4  
 
- 4 - 
 
  Country  Country  
Burkina Faso  
Burundi  
Cambodia  
Cameroon  
Cape Verde  
Central African Republic  
Chad 
Chile 
Colombia  
Comoros  
Congo, Dem. Rep  
Congo, Rep.  
Costa Rica  
Côte d'Ivoire  
Cuba 
Djibouti  
Dominica  
Dominican Republic  
Ecuador  
Egypt, Arab Rep.  
El Salvador  
Eritrea  
Ethiopia  
Nicaragua  
Niger  
Nigeria  
Pakistan  
Palau  
Panama  
Papua New Guinea  
Paraguay  
Peru 
Philippines  
Romania  
Russian Federation  
Rwanda  
Samoa  
São Tomé and Principe  
Senegal  
Serbia  
Seychelles  
Sierra Leone  
Solomon Islands  
Somalia  
Uganda  
Ukraine  
Uruguay  
Uzbekistan  
Vanuatu  
Venezuela, RB  
Vietnam  
West Bank and Gaza  
Yemen, Rep.  
Zambia  
Zimbabwe  Kazakhstan  
Kenya  
Kiribati  
Korea, Dem . Rep. 
Kosovo  
Kyrgyz Republic  
Lao PDR  
Latvia  
Lebanon  
Liberia  
Libya 
Lithuania  
Macedonia, FYR  
Madagascar  
Malawi  
Maldives  
Mali 
Marshall Islands  
Mauritania  
Mauritius  
Mexico  
Micronesia, Fed. Sts.  
Moldova  
Mongolia  
Montenegro  
Morocco  
Mozambique  
Myanmar  
Nepal  
South Sudan  
Sri Lanka  
St. Lucia  
St. Vincent and the  Grenadines  
Sudan  
Suriname  
Syrian Arab Republic  
Tajikistan  
Tanzania  
Thailand  
Timor -Leste  
Togo 
Tonga  
Tunisia  
Turkey  
Turkmenistan  
Tuvalu  
 
 
__________