WORLD TRADE  
ORGANIZATION  G/SG/Q1/ZAF/2 
16 November 2005 
 (05-5339) 
Committee on Safeguards Original:   English 
  
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER 
ARTICLE 12.6 OF THE AGREEMENT 
 
Replies to Questions Posed by the EUROPEAN COMMUNITIES
1 
Regarding the Notification of SOUTH AFRICA2 
  
 The following communication, dated 3 November 2005, is being circulated at the request of the Delegation of South Africa. 
 
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 In regard to the communications dated 21 April 2005 and 29 April 2005 (Corrigendum), 
circulated at the request of the Delegation of the European Communities, the Republic of South 
Africa has the pleasure of providing the responses se t forth below.  As an initial matter, the South 
African Minister of Trade and Industry am ended the Safeguard Re gulations published on 
27 August 2004.  Revised regulati ons, the Amended Safeguard Regul ations, were published in the 
Government Gazette  on 8 July 2005.  Accordingly, all refere nces below to the safeguard regulations 
currently administered by the International Trad e Administration Commission ("Commission") are to 
the Amended Regulations ("Regulations").  The Re gulations can be viewed on ITAC's official 
website at http://www.itac.org.za. 
 
 
Q1. The Preamble (point (d)) provides that “ safeguard measures are normally
 applied to 
imports from all countries even if the imports, whic h cause serious harm, originate mainly or only 
from one country ” (emphasis added).  Could South Africa  describe the circumstances in which 
departure from the erga omnes  character of safeguard measures is allowed under its legislation?  
If such circumstances go beyond the special and differential treatment in favour of developing 
countries as provided in Article 9 of the Agreement on Safeguards, could you please explain how you consider this to be consistent wi th Article 2.2 of the same Agreement? 
 Reply
 
 
 Consistent with Article 2.2 of the Agreemen t on Safeguards, the Regulations require the 
application of safeguard measures to all im ports of the product under investigation. 
 
 However, safeguard measures shall not be applied against a product originating in a 
developing country as long as its share of imports of the product concerned in SACU does not exceed 
three per cent, provided that developing countri es with less than three per cent import share 
collectively account for not more than nine per cent of total imports of the product concerned. 
                                                      
1 G/SG/Q1/ZAF/1 
2 G/SG/N/1/ZAF/2 G/SG/Q1/ZAF/2 
Page 2  
 
  
Q2. Article 2 introduces the notion of “relat ed parties”.  Could you please explain the 
relevance of the concept of “related parties” in the context of safeguards investigations? 
 
Reply
 
 
 Under the Regulations, the concept of "related pa rties" is directly linked to the definition of 
the "SACU industry" and , as a consequence, to considerations of standing and injury. 
  Where relevant, the Regulations, through the con cept of related parties, grant the Commission 
the discretion to modify the identity of the SA CU (domestic) producers w ho constitute the SACU 
(domestic) industry.  For a group constituting less than  producers as a whole, Article 4.1(c) of the 
Agreement on Safeguards requires only that this gr oup's output of the like or directly competitive 
products constitute "a major proportion".  Q3. Article 2 contemplates the possibility of ex cluding from the definition of the domestic 
industry (SACU industry) domestic producers that are (a) related to the importer, exporter or 
the foreign producer;  or (b) themselves importers  of the products under investigation.  Unlike 
the AD or CVD Agreements, there is no basis in  the WTO Safeguards Agreement that would 
allow to proceed with such exclusion – Articl e 4.1(c) of the Safeguards Agreement defines 
“domestic industry” as the producers as a whole of the like or directly competitive or those 
whose collective output constitutes a major propor tion of the total domestic production, without 
exception.  Please explain how Article 2 is considered  to be compatible with Article 4.1(c) of the 
Safeguards Agreement. 
 
Reply
 
 
 See answer to Question 2. 
 
Q4. Article 8.5 provides that the examination of  the injury factors will be considered for the 
like and directly competitive products only or, where such analysis is not possible, for the 
narrowest group of products for which such analysis can be made .  Article 4 of the WTO 
Safeguards Agreement does not provide for the possi bility to make injury determinations on the 
basis of another product definition than the like product or directly competitive product.  Please 
explain how injury determinations that would be  based on the “narrowest group of products” 
would be compatible with Article 4 of the WTO Safeguards Agreement. 
 Reply
 
  Consistent with Article 4 of the Agreemen t on Safeguards, section 8.5 provides that, in 
determining injury to the domestic industry, the fo cus is on domestic products that are "like" or 
"directly competitive".  The purpose of the qualificati on in this section of the Regulations – the focus 
on the narrowest group of products – is  to manage potential data issues. 
 
 Specifically, in evaluating the performance of the domestic industry, section 8.3 of the Regulations sets forth a list of potential injury f actors.   In obtaining information on these injury 
factors, domestic producers of the like or directly  competitive product may be unable to provide the 
authority with data at, among other things, the required product level.  The Commission may then 
request data for the narrowest group of products.  The qualification in section 8.5 of the Regulations 
takes real world data limitations frequently en countered in anti-dumping investigations into 
consideration with an aim to make safegua rd investigations as thorough as possible. 
  G/SG/Q1/ZAF/2 
 Page 3 
 
 
 Q5. Article 10 (causality) provides that the Co mmission shall consider all relevant factors 
including factors other than the imports of the product concerned that may have contributed to 
the SACU industry’s injury, provided that a participating interested party has submitted, or the 
Commission otherwise has, information on such factor or factors .  Please explain the process 
that will be followed by the Commission to obta in information on other potential factors of 
injury.  
Reply
 
  To date, the Commission has not conducted a saf eguard investigation.  The Regulations spell 
out two avenues for obtaining information on "factors other than imports of the product concerned".  
As in the trade remedies area, the Commission may obtain information from interested parties or the 
Commission may gather information by doing its own research.  
Q6. Article 21.14 provides that the Commission may depart from a proportionate allocation 
of the quotas among the suppliers having a substantial interest in supplying the product under 
investigation if “ the suppliers failed to cooperate in the investigation ”.  Please clarify the notion of 
“suppliers”.  In any event, the WTO Safeguards Agreement, in particular Article 5.2 thereof, 
does not allow Members to depart fr om the allocation rules provided in Article 5.2(a) in case of 
alleged “non-cooperation” from the suppliers.  Pl ease explain how Article 21.4 is considered to 
be compatible with Article 5.2 of the Safeguards Agreement. 
 Reply
 
 
 Article 5.2(b) of the Agreement on Safeguards permits a departure from the requirements set 
forth in subparagraph (a) if certain conditions  are met.  Among these conditions set forth in 
Article 5.2(b) is the requirement that such a depa rture be "equitable to all suppliers of the product 
concerned".  Section 21.14 also provides for such a departure where, among other factors, this is "equitable", but expounds upon consid erations of equity by adding the notion of non-cooperation.  
Where a supplying country refuses to cooperate and thereby impedes an investigation by, for 
example, failing to provide releva nt information, departing from th e proportionate allocation set forth 
in section 21.13 may be equitable. 
 
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