Independent lobby body for the preservation of local trade and industry, the FairPlay Movement, has criticised the World Trade Organisation (WTO) definition of “dumping”, which it says relies too much on price as a determining factor and doesn’t take “predatory” trade practices into account. Kevin Lovell, ex CEO of the South African Poultry Association (Sapa) and one of 11 experts on the FairPlay chicken panel, said that in terms of the WTO’s General Agreement on Trade and Tariffs, for a product to be considered as being dumped, “the export price of the product exported from one country to another must be less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country”. “This definition overlooks the multiple state interferences at play in the over-production of commodities, such as chicken in Brazil, the United States and the European Union. When exporting countries are able to reduce their cost of production through direct and indirect subsidies (including social support such as a social wage), predatory trade practices are enabled and local producers are destroyed.” Lovell said that this had been included in FairPlay’s comments submitted to the International Trade Administration Commission (Itac) in support of Sapa’s application for an increase in the rate of customs duty on frozen chicken this month. He said these practices circumvented “the intent of the mechanisms that should ensure equitable trade between nations”. Lovell said that while Itac was bound by the regulatory framework within which it operated, it was “ imperative” that it took the predatory nature of chicken imports into account. FairPlay highlighted in its submission that import volumes of dutiable bonein portions had nearly tripled in 2017 when compared to the previous year, with current statistics and trade conditions indicating that imports would continue unabated unless the local industry was given better protection. “South Africa is a highly efficient producer of chicken, more than able to compete with foreign producers. Competing against foreign government subsidies, however, is an impossibility,” Lovell pointed out, highlighting that the poultry industry was the largest component of South Africa’s agriculture sector, contributing 19.8% of agricultural GDP in 2017 (up from 18.3% in 2016), and 40.0% of animal product gross value (up from 39.2% in 2016). European and United States producers have meanwhile asked their own industry councils and trade bodies to look into retaliatory measures against South African imports should import duties be imposed against their frozen chicken products. Currently, agricultural producers benefit from low, or zero, import duties on a number of export products under trade agreements such as the US African Growth and Opportunity Act (Agoa) and the European Union and SADC Economic Partnership Agreement. Itac called for comments in November last year and interested parties have until the end of the month to submit their comments.
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The WTO definition overlooks the multiple state interferences at play in the overproduction of commodities, such as chicken in Brazil, the US and EU. – Kevin Lovell
