Brazil vows to take South Africa poultry dispute to WTO

17 February 2012

Following the decision of South Africa to impose higher tariffs on imported chicken products from Brazil, the Brazilian chicken industry said that it would place a case to the World Trade Organization arguing that the South African government's decision does not comply with WTO rules on anti dumping.

According to the WTO governments can act against dumping if there is a "material" injury to the competing domestic industry. The government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter's home market price), and show that the dumping is causing injury or threatening to do so.

In June 2011 the International Trade Administration Commission of South Africa (ITAC) initiated an investigation into the alleged dumping of frozen whole chickens and boneless chicken cuts imported from Brazil and made a preliminary determination that dumping had taken place, causing harm to the South African Customs Union industry. The Commission's report estimates the dumping margin for whole frozen chickens at 63 percent and 47 percent for boneless cuts.

Hence, the commission requested that the Government of South Africa impose provisional anti-dumping duties of 6 to 63 percent on poultry for six months.

According to Francisco Turra, the Chief executive of Brazil's poultry association UBABEF , "the poultry sector along with government agencies will appeal the decision of the Government of South Africa, which affects several Brazilian agribusiness exporters of chicken meat." "The industry estimates that losses will reach 70 million USD annually," he added.

According to UBABEF, South Africa imports 16 percent of all chicken consumed in the country, 70 percent of which is from Brazil. The other 84 percent comes from local production. The products under investigation for dumping represent 3 percent of all poultry products on the market.

"Imports from Brazil of the two products that are the subject of the anti-dumping action represent less than 2 percent of local production of these same products - hardly threatening," said  the CEO of the Association of Meat Importers and Exporters of South Africa, David Wolpert in a letter published in Business Day on February 7. According to him an antidumping action needs to show actual damage caused by the alleged dumping, yet annual reports of all local poultry producers show huge profits and not an industry in distress.

Source: Brazilian Poultry Group to Approach WTO About South Africa Chicken Tariffs , Bloomberg, 15 February 2012 ; ITAC Report on the alleged dumping of frozen meat n°389; Ubabef website

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