South Africa dtic: Withdraws China Import Checks Amid Pushback

• South Africa's Department of Trade, Industry and Competition (dtic) withdrew a directive for pre-export verification of Chinese imports.
• The program, initiated by Minister Parks Tau, aimed to ensure quality standards for various products like cookware and sanitary towels.
• It was abandoned days before implementation due to pushback from China and likely non-compliance with WTO non-discrimination rules.
• Trade experts indicate that WTO obligations require quality standards to be applied equally to all trading partners, not just specific countries.
• The future of such import checks remains uncertain, with calls for universally applied compulsory standards if quality control is the true objective.

Trade experts emphasize that under World Trade Organisation rules, any standards implemented must apply equally to all trading partners and domestic industries, rather than singling out a specific nation.

In a significant policy reversal, South Africa's Department of Trade, Industry and Competition (dtic) recently abandoned a planned pre-export verification of conformity programme targeting specific imports from China. The initiative, spearheaded by Minister Parks Tau in March, aimed to implement rigorous quality checks on a range of unregulated Chinese products before they entered the South African market. The directive was designed to protect both local consumers and businesses by ensuring that imported goods met South African national quality standards.

The proposed program encompassed a diverse list of products, including aluminium, various types of cookware and cooking pots, hair relaxers, sanitary towels, and office chairs, among others. The core idea was to conduct these verification checks in China itself, prior to the goods being loaded onto vessels for shipment to South Africa. This proactive approach intended to prevent non-compliant products from ever reaching local shores, thereby safeguarding the integrity of the domestic market and consumer safety.

Despite its stated objectives, the dtic's directive was abruptly withdrawn just days before its scheduled implementation this month. This sudden abandonment followed considerable pushback from China, which stands as South Africa's largest trading partner. The decision to halt the program has raised questions about the viability of unilateral trade measures that target specific countries.

Donald MacKay, the CEO of XA Global Trade Advisors, highlighted that the primary challenge with the directive was its selective focus on China. He explained that while the infrastructure for such independent verification checks exists through agencies like Bureau Veritas, the fundamental issue lay in isolating a single nation for these inspections. The withdrawal underscores the complexities South Africa faces in balancing domestic protectionist impulses with its international trade obligations.

A critical factor in the dtic's decision to withdraw the directive appears to be its potential conflict with World Trade Organisation (WTO) principles. Trade experts emphasize that under World Trade Organisation rules, any standards implemented must apply equally to all trading partners and domestic industries, rather than singling out a specific nation. MacKay explicitly stated that targeting China alone would constitute a breach of South Africa's WTO obligations, suggesting this was the underlying reason for the plan's abandonment, especially following a complaint from China to the WTO regarding the scope of the directive.

While countries are permitted to restrict trade in goods deemed dangerous to their citizens, such measures cannot be arbitrary. The principle of non-discrimination is paramount in international trade. For a quality control program to be compliant, it would need to establish compulsory standards that apply universally, meaning every country exporting a particular product to South Africa, as well as domestic producers, would have to adhere to the same requirements.

The future of such pre-export verification programs remains uncertain, with no clear indication whether the dtic intends to resume or permanently scrap the initiative. The composition of the initial product list also drew scrutiny; while the inclusion of items like female sanitary products for safety checks is understandable, the rationale behind including aluminium cookware is less clear, potentially hinting at a desire to protect the South African cookware industry.

For any future implementation of quality standards, the dtic would need to adopt a more comprehensive and WTO-compliant approach. This would involve establishing clear, compulsory standards for specific products, similar to existing regulations for cement, and applying them uniformly to all imports and domestic production. The timing of Minister Tau's initial directive, initiated in March, was also described as peculiar by MacKay, who expressed skepticism about consumer concern being the sole driver, given the lack of detailed information surrounding its origins.

This withdrawal signals that South African trade measures targeting specific countries, even for quality control, must adhere strictly to WTO non-discrimination principles. Lawyers and compliance officers should advise clients that while specific pre-export checks for Chinese imports are off the table for now, the dtic's intent to enforce quality standards remains, necessitating vigilance for future, WTO-compliant regulatory changes affecting imports from all trading partners.

Source: Reporting based on industry expert commentary.