The validity of tariff and non-tariff trade barriers is once again in the spotlight. This with the recent high-profile investigation by the International Trade Administration Commission (Itac) into raising duties on imported chicken. The appellants in this case are the Southern African Customs Union (Sacu) producers who want increased protection, claiming that they are “in distress”. But just exactly what that means they do not say. But the opposing case is that these distressed producers only have themselves to blame. It is said that they produce smaller birds than their overseas competitors, and their farm yields are therefore also much lower than those of the opposition. And, indeed, the fact that SA currently imports more than 20 000 tonnes of boneless chicken each year for the processing and food service industries would seem to indicate that there is definitely a market gap that the local industry doesn’t fill. Although, again, the local market critics point out that, with a relatively minor adjustment to the processing activities, the local producers could themselves fill that gap. Which leaves the glaring accusation that these distressed producers are just not globally competitive as far as their growing and processing go – and that they are demanding increased duty protection for all the wrong reasons. This whole argument was summarised by David Wolpert, CEO of the Association of Meat Importers and Exporters of SA. He was quoted by Fin 24 as having said that most of the local industries that want protection are not globally competitive. Instead of managing change and improving effectiveness, he added, they remain inwardly focused and expect local consumers to pay more because of these practices. And it’s not the first time that the local and regional agri industries have been accused of being “protectionist”. Free-market thinkers are adamant that, if local producers can’t compete, why should hardpressed consumers have to fork out more just to close the doors on cheaper imports from more efficient overseas agri industries? Also any cries from agri producers that they are unprotected and being openly exposed to unfair foreign competition just don’t hold water. Many of these industries are already protected through both tariff and sanitary and phytosanitary (SPS) measures. And it’s not as though chicken producers are the only agri industry that is bleating “foul”. Wolpert also listed wheat, sugar, potato, pasta, salmon, and pork producers also looking for greater protection He then pointed out that a number of these already enjoyed substantial tariff protection –with pork imports facing a 15% duty, potato chips 10%, and chicken 27%. And if any of them claim that dumping or subsidies in exporting countries are making for unfair competition, there are always standard procedures for getting protection against unfair and anticompetitive activities. But none of the list of distressed producers has laid charges of wrongdoing by the exporters, only admitting that they are unable to compete with fair competition. INSERT If local producers can’t compete, why should hard-pressed consumers have to fork out more just to close the doors on cheaper imports from more efficient overseas agri industries?
