DTI steel tariff agreement under threat while Davies drags his feet 

10 February 2016

The Democratic Alliance (DA) has learnt that ArcelorMittal may be in breach of an agreement between the Department of Trade and Industry (DTI) and local steel producers not to increase domestic prices in return for a 10% tariff on imported steel. 

The DA is in possession of a price increase notice from ArcelorMittal indicating that it has increased its prices despite being party to the agreement to freeze domestic prices. The deal was made between the DTI and steel producers in order to protect South Africa’s fragile steel producers from international firms dumping cheap steel into the market.   

I will therefore today write to Minister Davies providing him with the evidence and request that the matter be investigated in order to avoid “an immediate review of the tariff dispensation” by the International Trade Administration Commission (ITAC) “in the event of default.” Ultimately he must ensure that big steel producers honour their agreement with the DTI. 

Minister of Trade and Industry, Rob Davies, initially made the deal and assented to tariff increases for three steel product lines to shield local steel producers against dumping by foreign firms. If large domestic suppliers undercut this deal by raising their prices, local manufacturers will be left without competitively priced steel. 

The downstream impact of this will reduce South Africa’s competitiveness in the manufacturing and construction industries, amongst others, and could lead to company closures and job losses. 

This will also undermine the process currently underway to investigate the extension of tariffs to a further eight product lines. This process has already been dragging on for months; the DTI needs to finalise it as a matter of urgency. 

I will therefore also be seeking clarity as to why it has taken the Minster so long to complete the process and push him to provide a deadline. 

The DTI must ensure that the steel and manufacturing industry in South Africa does not suffer further job losses. We urge the Minister to hold large steel manufacturers to the agreement and accelerate the finalisation of other tariff increases without delay. 

Issued by Dean Macpherson, DA Shadow Deputy Minister of Trade and Industry, 10 February 2016