DA gets it wrong on anti-dumping duties

Oh what a turnaround for the Democratic Alliance, South Africa’s official opposition party.

In 2018, the DA’s trade and industry spokesman Dean MacPherson demonstrated in opposition to dumped imports and in support of the South African sugar industry, which had been brought to its knees by dumping.

Now MacPherson has issued an emotional statement opposing the anti-dumping duties newly in force against chicken imports from Brazil and four EU countries. He called the anti-dumping duties “egregious” and said imposing them was “a terrible decision” which should be reversed.

This is a great pity, not least because MacPherson is supposedly a trade minister in waiting. His statement showed a regrettable lack of understanding of how anti-dumping duties promote fair trade and combat dumping, which contravenes international trade rules.

Perhaps he is taking the line that everything the government does is wrong. The current trade minister, Ebrahim Patel, had stated that “the anti-dumping duties are protecting local producers from dumping, which destroys local jobs. This is consistent with the rules of the World Trade Organisation.”

MacPherson, unfortunately, placed too much reliance on the exaggerated claims of chicken importers, who are punting fears of sky-high chicken prices because of the new duties. So the DA states, wrongly, that tariffs “as high as 265% on imports from Brazil” would cause “astronomical chicken prices” and deal “a crushing blow to the already vulnerable households”.

It’s a pity MacPherson didn’t do more research. He would have discovered the zero likelihood that duties of 265% will apply to any frozen chicken entering South Africa, or affect retail prices. 

The new duties are set in a range, from low to high. The high duties apply to chicken producers in Brazil and the EU who did not respond to South Africa’s dumping investigation. In Brazil’s case it’s 265% and, at that price, those producers won’t be sending chicken our way. 

The DA needs to understand that Brazil’s big poultry producers, which did respond and will continue exporting to South Africa, will be subject to duties as low as 3.3%.  The same applies to poultry producers in the other four countries, where there are minimums of just over 2% for imports from Poland and Ireland, and 7% from Denmark and Spain.

It’s all spelled out in the Government Gazette which MacPherson and his researchers should have read before commenting. 

It’s also a pity that, before warning of the “astronomical” impact of the duties on retail chicken prices, MacPherson didn’t study the Genesis Analytics research into exactly that topic. Genesis found that the maximum potential impact could average 2.5%, and that in reality the impact would be a lot lower because of multiple competitive forces keeping prices down.

Because of a lack of research, the DA is promoting dumped imports and supporting jobs in Brazil and the EU over South African workers. That is surely not how they would like to be seen.