ITAC has published guidelines explaining how agricultural safeguard duties on certain products from the EU and the UK will be implemented. Pay attention here, because there is no investigation preceding the duties.

Because of the sensitivity of agricultural products, most trade agreements make provision for safeguard measures to be imposed on certain agricultural goods if the import volume exceeds a threshold volume. Although we have separate agreements with the EU and the UK, the guidelines are the same and so the commentary in this post applies to both.

The guidelines are published for implementation, not comment which means safeguard duties can be implemented immediately and without warning on the products within the scope as identified below.

The circumstances warranting a safeguard duty

According to Article 35 of both agreements a safeguard duty may be applied if the imports of the list of designated products exceeds the reference quantity in the agreement. The duty implemented may not exceed 25% of the WTO bound rate (the maximum level a given duty on product can be raised to), or 25%, whichever is the higher. If the bound rate on the product is 15% and the bound rate is 25%, then this means the bound rate can be breached, but only up to 25%. But, if the duty in place for countries not inside the trade agreement is 20%, then the safeguard duty will be capped at 20%. Practically, this means the safeguard duties will be taken up to the general rate of duty, as this rate is already not allowed to exceed the bound rate.

The safeguard duties are not a permanent fixture and can only remain in place to the end of the calendar year or for five months, whichever is the longer.

An agricultural safeguard duty can’t be imposed on top of a bilateral safeguard under the agreement. Bilateral safeguards allow countries to impose a duty, if because of the implementation of the agreement, the import volumes surge. They also can’t be imposed on top of a ‘normal’ safeguard duty or a special safeguard measure under the Agreement on Agriculture (a ‘normal’ agricultural safeguard).

Implementation of the safeguard duty

Any of the member states to the Trade and Development Committee can review the data which gave rise to the measure being implemented.

This works in much the same way was the dollar-based reference price duties on sugar and wheat, where no investigation takes place. In those cases it should take less than a month from when the trigger is hit to when the duties change. In reality it often, but not always, takes longer.

Why did it take eight years for the guidelines to be published?

When viewing the tables below, you will see the agricultural safeguard was available from 2016. The SACU Council of Ministers adopted the guidelines on 28 June 2023, taking a year from adoption to implementation. We don’t know why it took 13 months for the guidelines to be implemented and even more alarming, we don’t know why it took seven years to get the guidelines drafted and approved by the SACU Council of Ministers.

The products covered and the EU reference volumes

When the volumes imported, measured in metric tons, pass the reference volume in the table, the safeguard will be automatically triggered.

The products covered and the UK reference volumes

When the volumes imported, measured in metric tons, pass the reference volume in the table, the safeguard will be automatically triggered.

There appear to be errors in some of the UK reference volumes. We have contacted ITAC and asked them to provide clarity. We’ll update the tables when they respond.

What happens to volumes which are already over the limits?

Some of the products within the scope of the agricultural safeguard already breach the volume level to impose a safeguard for 2024 and could see duties imposed very soon.

To find out if you are affected, please contact us at info@xagta.com for a free assessment.