LETTER: Chicken importers cry foul but withhold facts

Chicken importers and their supporters are gearing up for a fight against anti-dumping duties that is is expected to last for most of this year. It is a pity they are not providing the public with all the facts.

Letters from Association of Meat Importers & Exporters CEO Paul Mathew and Hans Friedrich show what is to come (“Poultry tariffs hide failings”, January 25, and “Poultry importers late in joining anti-dumping fight”, January 31).

Both state there is no basis for the provisional anti-dumping duties announced last December on some chicken imports from Brazil and four EU countries. The implication is that the International Trade Administration Commission of SA (ITAC), which was established under the rules of the World Trade Organization, ignored or unfairly discounted evidence that could have changed its decision.

The contrary is shown by the detailed 187-page report published by ITAC on the reasons for its tariff determination. The regulator reviewed the evidence on dumped chicken imports submitted by the local poultry industry. It then wrote to the countries and poultry producers involved and asked for their detailed submissions, asked the local industry to respond to those submissions and then reached a decision. It has responded to every argument, often in detail and citing decisions in other countries on anti-dumping applications.

The main attack on the proposed anti-dumping duties is the notion that they aren’t  justified in terms of international trade regulations. For duties to be awarded, applicants must show three things: that dumping has taken place (imports at prices lower than what the goods are sold for in producer countries); that the local industry has been harmed (material injury); and that there is a causal link between the two (dumping caused the material injury or will do so in future).

In his letter, Matthew says the provisional duties should not have been imposed because “there is strong evidence that the alleged dumping has not been causing material injury to the domestic poultry industry”. Friedrich goes further — the local industry’s application was flawed, he says, and should not have been entertained “as there is no clear evidence of either dumping injury or even threats of any future dumping injury”.

Similar arguments were made to the commission by Brazilian poultry processor Copacol, which submitted that there had been no material injury to the SA industry, there was no threat of future injury and no causal link. The commission considered these arguments in detail, and rejected them in detail. This is a provisional determination, valid until June 2022, by which time a final determination is expected.

The commission’ provisional determination is unambiguous: there is sufficient information to indicate that chicken portions were being dumped in SA by producers in Brazil, Denmark, Ireland, Poland and Spain; that this had caused material injury to the local industry and threatened to do so in future; and that there was a causal link between the dumping and the injury.

It also rejected arguments that any injury suffered by the local industry was due to other factors, such as rising feed and other input costs or Covid-19 disruptions to production and distribution, lockdown impacts on demand and consumption, or imports from the US and Argentina.

These may all have played a part, it said, but the main cause of material injury to the local industry was dumped chicken imports from the five countries concerned. It also pointed out that the Covid disruptions and lockdowns had begun in March 2020, and therefore affected just a few months of the three-year investigation period, from July 2018 to June 2020.

It also points out that trade and bird-flu disruptions that reduced chicken imports weren’t permanent. The Covid-related impact would be reversed as the pandemic abated and trade returned to normal. This, together with mounting poultry surpluses in the EU where bird-flu bans may be lifted, are why the commission agrees with the SA poultry industry that there is a continuing and increased future threat from dumped chicken imports.

Given the commission’s meticulous approach it cannot be accused of a superficial investigation or of failing to consider counter-arguments to its decisions. Those arguments are likely to be raised again and again by importers this year, before and after ITAC’s final determination on anti-dumping duties against the five countries concerned. After all, as Friedrich points out, chicken importers’ profits are at stake. It is they who have most to lose if imports are replaced by local production and local job creation.

It would be helpful if importers’ arguments could be based on verifiable information, and the commission’s detailed rejection of their arguments, rather than on sweeping accusations against the independent regulator when its decisions do not find favour.

Francois Baird

FairPlay

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