Cablegate: South Africa May Terminate Anti-Dumping Duties

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RR RUEHDU RUEHJO
DE RUEHSA #4230 3550721
ZNR UUUUU ZZH
R 210721Z DEC 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 3007
INFO RUEHTN/AMCONSUL CAPE TOWN 5162
RUEHDU/AMCONSUL DURBAN 9446
RUEHJO/AMCONSUL JOHANNESBURG 7794
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS PRETORIA 004230

SIPDIS

SIPDIS

DEPT FOR AF/S; AF/EPS; EB/TPP
USDOC FOR JDIEMOND
USTR FOR PCOLEMAN
TREASURY FOR TRAND
USDA/FAS FOR OCRA/FERUS; ONA/MARKLEY

E.O. 12958: N/A
TAGS: ETRD ECON USTR SF
SUBJECT: SOUTH AFRICA MAY TERMINATE ANTI-DUMPING DUTIES

1. Summary. South Africa's International Trade
Administration Commission (ITAC) has proposed a
recommendation to terminate anti-dumping duties on Lysine,
Acetaminophenol, suspension PVC, and chicken meat portions.
ITAC's recommendation will be based on a recent South Africa
Supreme Court of Appeal decision, which determined that
calculation of ITAC's five-year limit for initiating sunset
reviews needed to be based on the date the duties were in
effect, not the date the notice of duties was issued. Based
on the court's determination, several of ITAC's sunset
reviews were initiated after the five-year deadline. End
Summary.

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Rescission of Lysine Investigation
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2. ITAC has proposed in a December 14 notice to rescind its
decision to initiate a sunset review investigation and to
terminate anti-dumping duties on lysine originating in or
imported from the U.S. retrospective to July 30, 2006. ITAC
is basing its recommendations on a recent South Africa
Supreme Court of Appeal decision, "Progress Office Machines
versus ITAC." The court determined that sunset reviews must
be initiated five years from the "imposition date" of the
anti-dumping duty, which is the date the South African
Revenue Service amendment was to have effect. Based on the
effective date for lysine anti-dumping duties, the sunset
review should have been initiated by July 30, 2006; however,
it was not initiated until January 12, 2007.

3. According to ITAC Senior Manager of Legal Services Nikki
Kruger, ITAC opted to recommend rescission of the
investigation as ITAC is procedurally authorized to rescind
an on-going investigation, which will also result in
termination of the duties as though the investigation had
never been initiated. Lysine was the only product still
under investigation at the time the court issued its ruling.
If ITAC's recommendation becomes a final decision, affected
importers will be able to obtain a refund of all duties paid
after July 30, 2006.

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Recommendation to Terminate Anti-Dumping Duties
--------------------------------------------- --

4. Kruger provided Agricultural Counselor and Trade and
Investment Officer with a courtesy unofficial copy of ITAC's
notice recommending termination of anti-dumping duties on
Acetaminophenol, suspension PVC, and chicken meat portions.
Based on the fact that the sunset reviews of Acetaminophenol
and chicken meat portions were not initiated per the court's
ruling in the "Progress Office Machines" case, ITAC is
providing notice of its recommendation that anti-dumping
duties in these cases be terminated with effect from
September 26, 2007 (the date the court issued its ruling.)
According to Kruger, a sunset review of suspension PVC was
never initiated and the anti-dumping duties lapsed in
October. However, ITAC included this product in its notice
so that the earlier September 26 effective date would apply.
The official notice is to be released on December 20 with
comments due to ITAC by January 31, 2008. Kruger stated that
she expects that a final decision following receipt of
comments will be released in February or early March 2008 at
the latest.

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Comment
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5. ITAC's implementation of the court ruling to terminate
anti-dumping duties could be a major boon for those U.S.
Qanti-dumping duties could be a major boon for those U.S.
exporters who have been blocked from these markets for years.
Although ITAC will await comment from industry before making
its final recommendation to the Department of Trade and
Industry Minister, given the breadth and application of the
court ruling, local industry will likely find it difficult to
argue against termination of the duties. In addition, these
industries will have an uphill battle to initiate a new
investigation since evidence of damages and dumping practices
will be difficult to prove when they have been operating in a
protected market.
BOST

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