VZCZCXRO1241
RR RUEHDU RUEHJO
DE RUEHSA #1833 1411127
ZNR UUUUU ZZH
R 211127Z MAY 07
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 9927
INFO RUEHTN/AMCONSUL CAPE TOWN 4374
RUEHDU/AMCONSUL DURBAN 8847
RUEHJO/AMCONSUL JOHANNESBURG 6796

UNCLAS PRETORIA 001833 
 
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 INITIATES INVESTIGATION FOR REMEDIAL 
ACTION AGAINST INCREASED IMPORTS OF LYSINE 
 
¶1.  South Africa's International Trade Administration 
Commission (ITAC) provided post with notice that it has 
initiated an investigation for remedial action in the form of 
a safeguard against the increased imports of lysine as 
provided in its Government Gazette notice dated May 11, 2007. 
 On the basis of information available, ITAC also made a 
preliminary determination that the surge in imports is 
causing serious injury to the Southern African Customs Union 
(SACU) industry and is imposing provisional measures due to 
critical circumstances.  ITAC is currently in the process of 
notifying all countries that may be significantly affected by 
the safeguard measure.  The time-limit for comments is 15:00 
on May 31, 2007. 
 
¶2.  South African company SA Bioproducts (Pty) Ltd, the sole 
producer of L-Lysine HCI (Feed Grade) min 98.5% (subject 
product) in the SACU, claims that a surge in imports of 
L-Lysine is causing serious injury to the SACU industry.  SA 
Bioproducts submitted information that China's 100,000 tons 
of installed capacity for lysine in 2003 rose to 480,000 tons 
of installed capacity in 2006.  According to SA Bioproducts' 
submission, China producers had overshot market needs and 
this encouraged them to dispose of this surplus capacity, 
thereby impacting world prices and forcing exporters to 
export at very low prices.  ITAC "decided that the expansion 
of capacity and oversupply in the world, which occurred after 
the negotiation of the relevant tariff concessions, could not 
have been foreseen at the time the concessions were 
negotiated and therefore represent unforeseen developments, 
in accordance with Article XIX of the GATT."  Based on this 
decision, ITAC requested the Commissioner for South African 
Revenue Service to impose provisional measures for a period 
of 200 days being a price disadvantage of 160 per cent ad 
valorem on L-Lysine HCI (tariff subheading 2922.41) and 
L-Lysine Sulphate (tariff subheading 2309.90.65). 
 
¶3.  A full copy of ITAC's Notice, Investigation Report, and 
SA Bioproduct's completed application for remedial action are 
located at post and can be forwarded via email if requested. 
Please contact Trade and Investment Officer Leslie Freriksen 
at freriksenld@state.gov to obtain a copy. 
Bost