SOUTH AFRICA ISSUES "ESSENTIAL FACTS" LETTER ON

UNCLAS PRETORIA 002738

SIPDIS

SIPDIS

DEPT FOR AF/S; AF/EPS; EB/TPP
USDOC FOR JDIEMOND
USTR FOR PCOLEMAN
TREASURY FOR TRAND

E.O. 12958: N/A
TAGS: ETRD ECON USTR SF
SUBJECT: SOUTH AFRICA ISSUES "ESSENTIAL FACTS" LETTER ON
SAFEGUARD INVESTIGATION OF IMPORTS OF LYSINE

REF: PRETORIA 001833


1. South Africa's International Trade Administration
Commission (ITAC) has provided post with a copy of its
"essential facts" letter regarding the safeguard
investigation of all lysine imports. As reported reftel,
ITAC initiated the investigation on May 11 and simultaneously
imposed provisional safeguard measures for a period of 200
days. Following receipt and review of comments, ITAC issued
its "essential facts" letter on August 1, 2007. ITAC has not
yet made its final determination and is accepting comments on
the "essential facts" letter until August 15, 2007.


2. According to the letter, "...the Commission is
considering recommending to the Minister of Trade and
Industry that a definitive safeguard measure of 27 percent be
imposed. The Commission is, however, of the opinion that the
imposition of this duty should be conditional upon the
Applicant (SA Bioproducts) committing to not deviate from its
current pricing model of not using import parity pricing.
From the information supplied by the Department of Science
and Technology and the Applicant, the Commission further
noted that the imposition of a safeguard measure will have
positive spin-offs to the development and sustainability of
the biotechnology industry in South Africa albeit to a
limited extent."


3. The letter also requests information regarding: 1) the
strategy of SA Bioproducts to improve its competitiveness; 2)
the role of SA Bioproducts in developing third generation
biotechnology in South Africa; and 3) the value or necessity
of having an operational plant, such as SA Bioproducts', in
the development of third generation biotechnology.


4. Note: The Pretoria High Court recently ruled that ITAC's
provisional remedy of 160 percent was in violation of South
African regulations because ITAC did not provide other
concerned parties the opportunity to comment or be heard
prior to imposition of the remedy. Post does not know the
possible impact of this judgment on ITAC's current
investigation and/or recommendation for final determination,
but will provide further information upon receipt. End Note.



5. Post has a complete copy of ITAC's "Essential Facts"
letter and the Pretoria High Court's judgment and can forward
same via email if requested. Please contact Trade and
Investment Officer Leslie Freriksen at freriksenld@state.gov
to obtain a copy.
Bost