“At present, the industry is anything but viable as a consequence of the unbridled imports and massive dumping that’s taking place,” said SA Poultry Association CEO Kevin Lovell. In February 2012, government’s International Trade Administration Commission (ITAC) imposed additional duties on the imports of boneless cuts and whole birds from Brazil for six months while it investigated dumping on behalf of SAPA.
Dispute
In June, Brazil initiated a dispute against SA at the World Trade Organisation (WTO). In October, the ITAC confirmed that dumping was taking place and recommended that duties be imposed against Brazil. However, DTI minister Rob Davies decided not to impose definitive anti-dumping duties on the imported products.
“Government is believed to favour a higher general tariff on these imported products. However, a government notice for the review of the applied customs tariff rate has not yet been issued,” said Trade Law Centre for Southern Africa researcher, JB Cronjé.
Pointing out that SA and Brazil are close political allies and members of the BRICS group (along with Russia, India and China), he said this was the fourth dispute brought to the WTO against SA’s application of anti-dumping measures – and none has advanced to a panel stage. Lovell said SAPA had hoped Davies would deal with the matter on the facts presented to him.
Lapsed
“The general tariff is a ‘fair trade measure’ and anti-dumping duties are an ‘unfair trade measure’. The investigation has now lapsed and we would have to begin the process again if we want the minister to assist us in creating a level playing field,” said Lovell. Raising the general tariff – which can be as high as 82% and is currently 27% or less – will make imports more expensive, without really addressing unfair trade.
“The biggest category of imports – bone-in portions – is mostly supplied by EU countries. The general tariff doesn’t apply to them, so raising the general tariff will only have a limited effect on the current problems that the broiler industry is experiencing,” said Lovell. “A satisfactory tariff is one that deals with the difference in costs of foreign versus local products. This has to be calculated on a tariff line basis; it’s not ‘one size fits all’.”
