The Tyre Importers Association of South Africa (TIASA) has applied to court to compel the International Trade Administration Commission of South Africa (Itac) and the South African Tyre Manufacturers Conference (SATMC) to disclose what it says is “critical information that is being withheld” regarding SATMC’s application for the implementation of anti-dumping duties on imported tyres.

The aim is also to challenge the manner in which Itac is conducting the investigation.   

SATMC, which includes Continental, Bridgestone, Goodyear and Sumitomo, has applied to Itac for the implementation of additional duties of between 8% and 69% on passenger, taxi, bus and truck vehicle tyres imported from China. 

Current import duties levied on tyres range from 25% to 30%.

“We are operating in the dark when it comes to this application for additional duties, and the stakes are high for South Africa,” says TIASA chairperson Charl de Villiers.

“If ITAC decides to impose the maximum duty percentage requested by SATMC, we could see price increases range from 41% for taxi tyres, 38% to 40% for passenger tyres and an average of 17% for truck and bus tyres. 

“These increases will have dire consequences for commuters, the transport sector, and consumers, who are struggling with climbing inflation.”

TIASA adds that domestic manufacturers are unable to produce the full range of tyres required locally, which sees them import a number of tyres to meet demand. 

“SATMC concedes that, in addition to manufacturing tyres locally, it also imports tyres, but refuses to disclose what they import, from where, and for what reason,” notes the importers association.

“This information is critical, as causality is a foundational principle of an anti-dumping case,” notes XA Global Trade Advisors CEO Donald MacKay.

“In other words, it’s necessary to prove that any injury to the local industry must have been caused by the dumping, and not by something else. If SATMC members are importing a significant volume of tyres themselves, they would be inflicting their own injury, which would need to be offset for any injury they claim. 

“They would, therefore, need to demonstrate a compelling reason for the imports.”

“This is not confidential information, and it is material to their import duty application and their rationale,” says MacKay.

“For example, we know Continental and Goodyear import 100% of truck and bus tyres, yet these domestic producers are importing these tyres instead of purchasing them from the other domestic producers who do manufacture them locally. Why? 

“SATMC has refused to share any of this information with TIASA, and Itac has accepted this.”

Itac Process ‘Flawed’
According to TIASA Itac received “an enormous response” to its investigation, from more than 60 companies, but decided to only review a small sample of submissions as the basis for its final decision. 

Furthermore, there was no consultation in respect of the sampling, with Itac refusing to allow TIASA to make any comment or input on the sampling methodology, notes the association.

 “With a complex product like tyres, where the local market sells over 3 000 different models, it is almost impossible to select a truly representative sample,” says Mackay.

“To base a duty decision on such a flawed process is deeply concerning.”

TIASA says it is, therefore, asking the court to direct Itac to remedy its sampling, to provide TIASA with SATMC’s import data, as well as the reasons for their imports, and to allow TIASA sufficient time to make a submission to Itac before it takes any decision on the imposition of duties. 

“If the current process is not corrected, it’s likely that Itac will impose provisional duties without SATMC’s import information, or indeed TIASA’s submissions which have, to date, been excluded from consideration by Itac,” notes De Villiers.

“This will be a clear impingement on the rights of affected parties to meaningfully participate in this process.”

SATMC Responds
SATMC says it “has received TIASA’s Notice of Motion, which is currently being addressed. As SATMC, we believe we should respect this process”.

SATMC applied to Itac for an investigation into tyres from China, on the basis that it believes that these products are imported at unfair prices that are causing harm to the industry.

The Itac investigation was initiated on January 31. 

The conclusion of the preliminary phase of the investigation will be followed by an initial report, which will set out Itac’s preliminary decision. 

Interested parties will have 14 days from the date of publication of the preliminary report to comment in writing to Itac.

The investigation will then continue into the final investigation phase, during which the commission will review all interested parties’ comments and verify the information that was submitted, before issuing an Essential Facts letter. 

This will be followed by Itac’s final determination, which must be published on or before July 31, 2023.