Industries identified as strategic in the department’s industrial policy action plan should be nurtured behind higher tariff walls to ward off their "decimation" by cheap imports, the department’s acting deputy director-general Garth Strachan said. Glass, tyres, a range of household goods and plumbing materials were among the products facing surges in imports.

 

Generally, South Africa’s economy was an open one both with respect to tariffs and nontariff barriers such as compulsory specifications and standards, Mr Strachan said.

 

The tariff structure was comparatively low and there was also a significant gap between the applied rates and the bound rates, a gap which Mr Strachan believed should be reduced to the benefit of local industry. "There are many products that are vulnerable to cheap imports," he said. "We must make sure that we apply the maximum tariffs allowed by the World Trade Organisation (WTO)." These are the bound rates.

 

But he emphasised that due process had to be followed and that companies would have to apply to the International Trade Administration Commission (Itac) for an upward adjustment of tariffs. Under WTO rules, a government cannot decide off its own bat to raise tariffs across the board.

 

Mr Strachan said the government would not support higher tariffs in all cases. They would be inadvisable if used to protect monopolies applying import parity pricing, or against products used as intermediate goods in local manufacturing. "The tariff regime has to be closely associated with the objectives of the industrial policy plan, namely to protect South Africa’s manufacturing base and allow it to scale up and be more competitive," he said.

 

Manufacturing Circle chairman Stuart Jennings agreed that the gap between the applied and bound rates should be closed, and said many of the association’s members had applied to Itac for tariff hikes.

 

There were a host of products where the applied tariffs were much lower than the bound rates and where there was room for the tariff to be raised, he said.

 

"The good thing is Itac seems to be changing and is realising that the country reduced tariffs far too quickly and that local industry needs some nurturing," he said.

 

He said the government should be "more aggressive" in fighting for South Africa’s interests in international forums. It had "collapsed" on the issue of anti-dumping duties on frozen chicken from Brazil when Brazil took the matter to the WTO.