Decision on Scrap Metal Trade Restrictions Taken in ‘Bad Faith’



Amanda Visser | Moneyweb

The [South African] government’s decision to extend the price preference system (PPS), which forces a discount on the local sale of scrap metal, and still introduce an export duty that was supposed to replace the system, seems to have been done in bad faith.

From August 1 both restrictions will run parallel for two years. Industry and trade experts say it is unreasonable, irrational and arbitrary. The decision is legally changeable.

Caroline Rheeder, associate director of customs at Cova Advisory, says although imposing the PPS and export duties simultaneously are allowed in terms of the World Trade Organisation, subject to trade agreement obligations, it does feel like over-restriction. “It might well be challenged by the industry.”

The Department of Trade, Industry and Competition (dtic) on Wednesday announced that the PPS will be extended for another two years to “support” the export duty.

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