TRALAC - Trade Law Centre

South African embassy lends support to GSP petition for manganese metal exports

Monday, 14 April 2008

Source: The Earth Times

South African Ambassador H.E. Welile Nhlapo today urged the United States GSP Committee to grant duty-free status to exports of electrolytic manganese metal powder, stating that GSP status is “important to South Africa’s ability to continue exporting to the U.S. market.”

The U.S. Trade Representative is currently reviewing a petition submitted by Manganese Metal Company (MMC) for duty-free treatment of electrolytic manganese metal powder under the Generalized System of Preferences (GSP). A decision is expected in the coming weeks.

South Africa is the only country besides China to export electrolytic manganese metal powder to the United States, where it is used in the production of high-quality welding and metal alloy products. The South African company, MMC, is the only producer that uses environmentally-friendly processes developed in cooperation with the U.S. Bureau of Mines.

“MMC has been a long term, reliable supplier of this important product to the United States,” said Mr. Nhlapo. “A strong case has been made that GSP treatment for electrolytic manganese metal powder exports is needed so that it can remain competitive in the U.S. market and continue to supply its U.S. customers. We are optimistic that GSP will be granted.”

MMC operates its plant in the province of Mpumalanga, a primarily rural area of South Africa, where the company is the largest industrial concern and employs more than 300 people directly and another 400 as contractors. In addition, more than 600 industries and service providers derive their incomes by virtue of MMC maintaining its current levels of operations.

Mr. Nhlapo added that “through the African Growth and Opportunity Act (AGOA), the United States Government has made its intention clear to assist sub-Saharan African countries, such as South Africa, and its industries in disadvantaged communities, in creating jobs and furthering economic development. Granting GSP status for electrolytic manganese metal powder such as that produced by Manganese Metal Company would be consistent with the United States’ firm commitment to assist in the development of Africa’s economies and businesses through increased trade opportunities.”

For more information on the impact of the GSP decision on MMC and its South African community, please contact Ms. Lerato D. Mataboge, Minister Economic, Embassy of South Africa at (202) 274-7973 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Embassy of South Africa

Ms. Lerato D. Mataboge

Minister Economic

202-274-7973

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

>AGOA.info has received some perspectives on the matter above from Mr Victor Mroczka, an Attorney at Vinson & Elkins LLP based in Washington D.C.

A summary of points is listed below:

 

 

MMC's petition for GSP treatment should be granted because:

Granting GSP treatment is consistent with U.S. trade policy

The Bush Administration has repeatedly affirmed that it wants to promote trade with Africa.

In February 2008, President Bush stated that "{t}he best way to generate economic growth in Africa is to expand trade and investment."

Granting GSP treatment would help provide a sustainable future for the people and businesses that rely on MMC, which is consistent with the purposes of the African Growth and Opportunity Act.

MMC's petition enjoys bipartisan support from members of Congress who have taken an interest in South Africa's situation and the deleterious impact that Chinese manganese metal powder has on U.S. workers and consumers.

Granting GSP treatment will partially minimize the impact of the South African power crisis

South Africa is experiencing a nationwide electricity emergency.

This has resulted in production losses and MMC is producing at 80% of its normal output.

This is expected to continue for the foreseeable future.

The United States should show its commitment to South Africa at this time of crisis.

By supporting MMC's petition, the GSP Subcommittee would demonstrate that the United States values the presence of an African product that is cleaner and safer for U.S. workers and consumers.

South Africa is rapidly losing market share to China.

South Africa's U.S. market share has decreased from 100% to 19% is just four months.

Granting the GSP petition is desperately needed by MMC to maintain its customer base as it will show U.S. consumers that the United States supports South Africa during the electricity crisis as well as going forward.

Without GSP, MMC will likely exit the market and theUnited States will be handing another industry over to China, leaving U.S. consumers and workers at China's mercy. This is not what the United States should be promoting.

A decision is due in May by the Committee, with final recommendation coming from the President in June.

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