Amending South Africa's anti-subsidy legislation

Abstract

In January 2009 South Africa's International Trade Administration Commission published draft amendments to the Countervailing (Anti-Subsidy) Regulations. After a brief overview of countervailing in South Africa this article considers the most important proposals and evaluates them, inter alia, against the World Trade Organisation's Agreement on Subsidies and Countervailing Measures to determine whether the amendments will improve consistency with South Africa's international obligations and increase transparency and fairness in countervailing investigations. The analysis shows that some of the proposed amendments, such as the inclusion of interested party hearings, amendments to the final investigation procedures and the determination of the export price in reviews will increase transparency in investigations. On the other hand the proposals to amend the definition of the domestic industry, to target only foreign producers and not necessarily exporters and to limit reviews to subsidy programmes included in the original investigation, will decrease the effectiveness of the instrument. By targeting only foreign producers and not exporters, the Regulations cannot be applied to any export subsidies paid directly to exporters who are not producers. Limiting the scope of review to subsidies that were countervailed in the original investigation, means that new or amended subsidies will not be countervailed. In addition, interested parties' rights to review are severely curtailed through proposed amendments to interim and judicial reviews, thus making the process less transparent. Viewed holistically, the amendments will detract from the current Countervailing Regulations.