A Closer Look

Anti-Dumping Fervour Undermines Free Trade Spirit

Opinion piece by Paul Matthew, CEO of the Association of Meat Importers & Exporters (AMIE)

The current noise about the ‘dumping’ of poultry products on a seemingly unsuspecting South African consumer is obscuring the real issues. Instead of addressing the long-term structural problems within the poultry industry, the Department of Trade and Industry is applying punitive tariffs to paper over their own shortcomings in developing our exporting capacity.

Anti-dumping duties may well be the most feel-good short-term trade remedy on offer for a poultry industry that claims to be struggling, yet ultimately they are ineffective. When governments implement these punitive trade tariffs, in response to either perceived or real ‘dumping’ of products by foreign companies, they can claim to have ‘done something’ and protected ‘local interests’.

There does not really seem to be any benefit to local consumers: despite trade protection for a number of years, and declining imports as a result, the price of poultry has increased 11% of the last year. (Put in link to the report).

In December 2021 South Africa imposed provisional anti-dumping duties on chicken imports from Brazil (265.4%) and four European Union countries – Denmark (67.4%), Ireland (158.42%), Poland (96.9%), and Spain (85.8%).

These duties will remain in effect until June 14, 2022, by which time the country’s International Trade Administration Commission (ITAC) is expected to have completed its investigation into an application by the local poultry industry for anti-dumping duties against the five countries.

Unfortunately it appears that it is, once again, the South African consumer (already under massive financial pressure and strain) who will suffer. Trade duties are supposed to be a short-term measure to protect the local industry from predatory imports, not a long-term strategy to prop up an ailing poultry industry that is beset with structural inefficiencies.

The Association of Importers & Exporters (AMIE) has dissected the ITAC Anti-Dumping report and there is strong evidence that the alleged dumping has not been causing material injury to the domestic poultry industry and therefore the duties should not have been imposed in the first place.

Instead of imposing yet more barriers to trade, government as a whole should be investigating and addressing those structural impediments that render South African producers much less efficient than they could be.

One needs to ask what has happened to the Poultry Master Plan. The core underpinning object of the plan was for local producers to export the “white” meat to trade partners overseas. Three years since signing the plan nothing has happened. Instead, there have been mountains of red-tape bureaucracy, and cost-inducing delays driven by the local poultry sector because of the inefficiency of our import & export systems.

A punitive trade policy footing will not solve the barriers and inhibitors on local growth and will increase the hardships of stressed South Africa consumers.

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