When anti-dumping duties are imposed, they remain in place for 5 years, at which point they expire unless a sunset review is initiated. In South Africa this means that the current anti-dumping duties will remain in place until the sunset review investigation is complete.
Unlike many other countries, SACU re-calculates the anti-dumping duties for every company which had an anti-dumping duty imposed in the original investigation. In the case of cement from Pakistan, no companies were exempted last time, which means that unless Pakistani exporters respond, the anti-dumping duties will be changed to the requested level of 43.49% for all exporters from Pakistan.
Any Pakistani producers who do respond, will have their duties recalculated based on their own information.
The original cement investigation was contentious with fairly large compliance problems with the WTO Anti-dumping Agreement. Pakistan in fact challenged SA at the WTO, but later withdrew their case. We have not yet had sight of the application and so have no sense of whether this will recur.
Since the anti-dumping duties were imposed in December 2015, Pakistan’s exports shifted to Vietnam. Total cement import volumes dropped for the 2 years following the imposition of the duties against Pakistan, but then rapidly began climbing in 2018 for Vietnam. The period of investigation for assessing dumping is January to December 2019 and in that period Vietnam completely dominated the imports (940 000 tons – 90% of all cement imports, with Pakistan now only accounting for 9.5%).
When you see almost complete trade diversion to a different country, following the imposition of duties, rather than the volume being picked up by the local producers, this often is an indication of an inefficient local industry, particularly on a commodity product such as cement. You also have to ask how it is possible to ship cement half way around the world and still be competitive, yet be unable to deliver it locally more than 300km from the factory before you lose money. I am not sure what the story is for Vietnam but for Pakistan a key factor is some very clever negotiating with shipping lines who carry our coal to Pakistan and who are not keen to come back empty.
No anti-dumping action has been initiated against Vietnam whose FOB value in the investigation period was R660 per ton compared to Pakistan’s R790 per ton (to which you still need to add the anti-dumping duties already in place).
The deadline to respond is 11 January 2021.
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