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