Trade, industry & competition minister Ebrahim Patel wants the tariff structure for poultry imports reviewed to include the introduction of specific anti-dumping measures to protect the struggling local industry.
In a recent notice published in the government gazette, Patel instructed the International Trade Administration Commission (Itac) — the organisation tasked with customs tariff investigations, trade remedies, and import and export control — to review the entire tariff structure for poultry, taking into consideration the introduction of specific rather than ad valorem customs duties [a duty calculated according to the price of a product, rather than at a fixed rate].
Interested parties have until April 16 to make submissions.
Last week, Izaak Breitenbach, the GM of the SA Poultry Association (Sapa), the organisation representing SA poultry producers, told Business Day the poultry master plan sought to “weed out all forms of unfair trade, including trade that contravenes WTO [World Trade Organization] rules and regulations” and the notice in the government gazette was in line with this goal.
“Unfair trade in poultry is vast and current measures in place are not effective at preventing it, as we see significant levels of unfair trade practices continue,” Breitenbach said.
He said SA’s poultry industry is not alone in seeking these remedies.
“We have recently seen the EU implementing anti-dumping duties on metal from China, and the US imposing duties on mattresses from seven countries found to have dumping margins as high as 763%. The South African poultry industry suffers from exactly the same problem.”
Breitenbach said anti-dumping duties on their own are not effective if underhanded trade continues to take place, such as under-declaration of imported product prices to reduce the percentage-based duties payable, or declaring a product that is liable for a tariff under a different product category that is exempt from tariffs, to evade paying tariffs.
“It is due to all of these issues that Itac has launched an investigation into the applicability of the current trade practices being used in the industry,” Breitenbach said.
In February, Sapa applied for anti-dumping duties on imported chicken from five countries — Brazil and EU states Denmark, Ireland, Poland and Spain. The organisation argued that cheap imports from Brazil and the four EU states are unfair because they create jobs in the producer countries while stifling economic growth in SA.
It seeks anti-dumping duties based on the difference between what frozen chicken portions are sold for in the producer country and the lower export price of frozen chicken portions to SA.
Sapa said dumping margins of up to 201% had been noted.
The poultry industry is the largest segment of the agricultural sector, contributing about R50bn a year to SA’s GDP, and is responsible for at least 110,000 jobs.
The sector has in the past shed thousands of jobs and ascribed its struggles to cheap chicken imports from Brazil, the US and Europe. But SA meat importers argue that the lack of competitiveness of the local poultry industry is to blame.
In 2020, despite objections by meat importers, the government moved to protect the sector, gazetting tariff increases to 62% on bone-in chicken portions while tariffs on boneless portions were raised to 42%. Local industry players wanted an 82% tariff hike on both categories, up from 37% and 12% respectively. Imports make up about 30% of chicken consumed in SA, with Brazil, the EU and US the major suppliers.
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