South Africa (SA) has had to hastily withdraw anti dumping duties on paper imports from Brazil and Indonesia after Indonesia began a consultative process in the World Trade Organisation (WTO) — a first step in declaring a trade dispute under WTO rules.

The move may signal the start of the withdrawal of a host of other anti dumping duties.

On Friday, SA’s International Trade Administration Commission (Itac) gazetted the withdrawal of anti dumping duties on uncoated wood-free A4 paper from Brazil and Indonesia.

It was expected the duties would be amended to avoid a full-blown trade dispute.

The matter is also related to a court case the South African Revenue Service (SARS) lost last year. SARS administers the collection of customs duties and the case it lost has far-reaching implications for a host of anti-dumping duties on 19 products, including blankets, chicken pieces, glass, stainless steel tubes and automatic circuit breakers.

SA first imposed anti dumping measures on white A4 paper from Indonesia in May 1999.

Under WTO rules, the duties must be lifted after five years unless a review determines that the importing country would suffer further injury if they were removed.

Itac began what are known as sunset review proceedings. However, paper importer Progress Office Machines brought a court case challenging Itac’s interpretation of the five-year period.

The importer lost the action in the high court but the Supreme Court of Appeal ruled that Itac had erred in interpreting the allowed five-year period.

Indonesia’s is the first international challenge to SA’s anti-dumping application based on the outcome of the court case.

In a related development, Itac said last month it had rescinded its decision to do sunset reviews on anti dumping duties on carbon black and galvanised steel tubes and pipes.

It is unclear why Itac has opted for a piecemeal — rather than blanket — withdrawal of the sunset reviews affected by the ruling.

Itac chief commissioner Siyabulela Tsengiwe could not be reached for comment yesterday.

Trade lawyer Hilton Zunckel, however, heaped scorn on Indonesia’s handling of the matter. He pointed out that Indonesia launched the consultative process with the WTO soon after a state visit by President Susilo Bambang Yudhoyono to SA earlier this year.

Discussions between Yudhoyono and President Thabo Mbeki focused on strengthening of bilateral relations. The two presidents undertook to minimise obstacles to trade and foster co-operation in multilateral institutions, which logically includes the WTO.

SA and Indonesia are part of a group of developing countries concerned with industrial goods in the Doha trade talks.