October 8, 2013
South Africa imposes anti-dumping tariffs against Brazil poultry
By opting for import tariffs as opposed to anti-dumping measures, South Africa has avoided a trade dispute with Brazil over the poultry tariff review.
Brazil had indicated that it would not be happy and would resist anti-dumping duties on chicken products from the country. In an interview on the sidelines of the first national summit on broad-based black economic empowerment, Trade and Industry Minister Rob Davies said anti-dumping measures against Brazil had been rejected.
Gilmar Henz, the Brazilian agricultural attaché to South Africa, said there was no proof that Brazil exported its poultry at less than the cost of production in that country, hence anti-dumping tariffs would have been awkward at the very least.
Henz confirmed that out of the 120 countries, South Africa was the only country that Brazil did business with to have started an anti-dumping investigation.
Recently, South Africa raised tariffs on imported chicken products by 8.75 percentage points on average and 82% for a "whole bird" to protect local producers. The measures are targeted mainly at Brazil which accounts for 52% of South Africa''s chicken imports.
Davies said he agreed with a statement by the Congress of South African Trade Unions (COSATU) that Brazil and Argentina were significant exporters of poultry products to South Africa, but he would not comment on the claim that "this is not surprising as these countries are known for their protectionist policies, in particular subsidies to their agricultural sectors".
He said South Africa''s added protection against cheap poultry imports still had an additional challenge from the EU because of the bloc''s free trade agreement with South Africa.
Davies said that jobs in the local chicken production sector were threatened by chicken imports, but it was now possible that more jobs would be created.
Henz said South Africa still needed to import some mechanically deboned meat cuts because it did not have the technology to produce them, hence the tariff review did not raise these exponentially. He added that even the cost of electricity was much cheaper in Brazil than in South Africa, which reduced input costs in agricultural production.
Davies denied that poor South African consumers, who relied on chicken as their main source of protein, would suffer most from the imposition of tariffs. He also wanted a review on the practice of injecting brine into chicken. Some chicken products of local producers had been found to contain as much as 30% brine.
COSATU said a protected market for local producers should be accompanied by conditions, including the creation of decent jobs. It noted that the five local poultry producing companies had claimed that 11,995 direct jobs and 14,892 indirect jobs were likely to be created if tariffs were imposed to the maximum rates of 82%.