INTERNATIONA TRADE ADMINISTRATION The role of the Board

INTERNATIONA TRADE ADMINISTRATION The role of the Board on Tariffs an Trade (BTT) in support of the strategic thrust of Industrial and Trade Policy

Historical Background of the BTT ¨ The BTT is a statutory body which has been in existence in different shapes and forms since 1925. ¨ The legal basis for its existence is the Board on Tariffs and Trade Act No. 107 of 1986. ¨ Its mandate to administer trade extends beyond the South African economy to the Southern African Customs Union (SACU). The BTT is responsible for administering the SACU common external tariff.

Primary objectives of the BTT ¨ To enable the active management of the relationship between on the one hand the South African and SACU market and on the other the global trading market in order to ensure that the workings of the latter do not entrench poverty and inequalities in the country and the SACU area. ¨ In the context of DTI’s integrated industrial strategy, to facilitate the development of new sources of competitive advantage in South Africa and the SACU region. ¨ In a rules based global trading system, to ensure that not only does South Africa abide by the rules, but that she is also empowered by these rules.

Core Functions Of The BTT ¨ Ensuring that the lowering of tariffs in line with our obligations which arise from the WTO agreements does not undermine industrial and economic growth. ¨ Within the framework of our international obligations, managing a system of moderate protection in order to encourage the development of industrial capacity in South Africa and the SACU area.

Core Functions Of The BTT ¨ Providing a proactive, responsive and effective trade defense system for South African and SACU industry against predatory and unfair trade practices. ¨ Administering the remaining tariff structure in a manner supportive of government efforts to boost exports and sharpen competitiveness.

Key I NSTRUMENTS At The Disposal Of The BTT ¨ Tariffs in the broader sense – to ensure that the structure of industry is not distorted by the fulfillment of the obligations arising out of the Uraguay round of tariff cuts and internal tariff reform. ¨ Trade Remedies ie, Antidumping, Safeguards and Countervailing measures, to defend SACU and South African industry against unfair trade practices and to ensure relief to industry where tariff liberalization has adverse effects.

Key I NSTRUMENTS At The Disposal Of The BTT ¨ Rebate permits - 90% of the work on this is to support the motor industry development Program (MIDP), and the development in general of new sources of competitive advantage particularly for exports. ¨ Duty credit certificates. ¨ Import rebate credit certificates ¨ Import and export permits

Current Output Per Annum OUTPUT TARIFF NVESTIGTNS. ANTI-DUMPING & COUNTERVAILING INVESTIGATIONS REBATE PERMITS DUTY CREDIT CERTS. IMPORT R. C. CERTS. QUANTITY 150 20 1 200 150 2 800 IMPORT PERMITS 20 000 EXPORT PERMITS 10 000

MAJOR PROJECTS UNDERTAKEN THUS FAR ¨ WTO Uruguay tariff cuts and domestic tariff reform. ¨ Phase-down program for the textile and clothing tariff structure. ¨ Motor industry development program (MIDP) and the mid-term review. ¨ Tariff dispensation for agricultural products (wheat, maize, sugar, dairy products, etc.

MAJOR PROJECTS UNDERTAKEN THUS FAR ¨ Development duty on electronic cards. ¨ SA/EU development and trade agreement. ¨ SADC free trade agreement.

Average Industrial Tariffs Post Uruguay – All Lines Import Weighted % All Goods 1994 1999 GATT 14. 4 6. 9 15. 7 Capital 11. 1 Goods Intermediate 7. 7 7. 1 14. 3 3. 9 10. 7 Consumption 32. 2 17. 2 26. 3

Average Industrial Tariffs Post Uruguay Minus Zero Rated Lines Import Weighted Average All Goods 1994 1999 GATT 24. 2 23. 7 20. 4 Capital goods 22. 1 16. 9 20. 8 Intermediates 12. 5 12. 0 13. 0 Consumption 40. 1 33. 3 28. 7

Performance of the MIDP YEAR 1997 VALUE OF EXPORTS (Rb) 6, 6 1998 10, 1 1999 14, 8 2000 17, 0

Anti-dumping And Countervailing Action ¨ With the opening up of the economy, anti- dumping and countervailing action against trading partners has increased dramatically. ¨ This however should not be alarming since globally, post Uraguay and with the shift away from reliance on tariffs, the use of anti -dumping and countervailing measures has in general increased.

Anti-dumping And Countervailing Action ¨ Furthermore developing countries are increasingly resorting to these measures for example while South Africa had 19 antidumping cases in 1999, India had 54, the EU 38 and the US 35. ¨ Similarly the number of anti-dumping units has increased dramatically from 7 active anti-dumping units to more than 30 most of which are in developing countries.

Current Structure of the BTTThe Board ¨ The Board comprises of two full-time and three part-time members. ¨ It meets every Wednesdays to consider petitions for tariff changes, trade remedial action, etc, from industry and make recommendations to the Minister of Trade and Industry. ¨ In the case of agricultural tariffs and remedial action, the Board also consults the Minister of Agriculture.

Structure of the BTT ¨ The Board is supported by investigative and administrative staff drawn from the DTI. ¨ The investigative staff looks into all requests for duty rebates and drawbacks, tariff amendments, import and export permits, and trade remedies and reports its findings to the Board.

The Future Of The BTT ¨ Work is currently underway to disestablish the BTT and replace it with a Commission for International Trade Administration (CITA) ¨ Parallel to CITA, DTI also envisages the establishment of a Tribunal as well as an Appeal Court for international trade matters.

Reasons For Disestablishing The BTT and New Structures ¨ Transformation of DTI entailing the separation of administrative and regulatory functions from delivery and policy matters in order to enhance performance. ¨ Compliance with the requirements of the WTO agreements. ¨ The need to ensure effective responses to new challenges posed by globalization in relation to market access and non-tariff barriers to South African trade.

Reasons For Disestablishing The BTT and New Structures ¨ The need to provide for the performance of additional functions, particularly the monitoring of the implementation of trade agreements between South Africa and trading partners, and providing technical support to sectors of industry charged with unfair trade practices in other countries. ¨ The need to enhance the professional and technical expertise offered to DTI and the Minister of Trade and Industry in their key role in the development of the rules based global trading system.

Reasons For Disestablishing The BTT And The New Structures ¨ The need to sharpen the technical expertise at the disposal of the government when negotiation agreements with trading partners. ¨ The need to afford South African industry stability, predictability and transparency in international trade administration. ¨ In the context of liberalization, the need to provide South African industry a pro-active, responsive and effective trade defense and remedial system.

CONTACT DETAILS ¨ Nozipho Mxakato-Diseko Telephone No. 012 -428 7700 Fax No. 012 -428 7702 e-mail ndiseko@dti. pwv. gov. za

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