Dumping is defined in the Agreement on Implementation of Article VI of the GATT 1994 (The Anti-Dumping Agreement) as the introduction of a product into the commerce of another country at less than its normal value.
Further the European Commission has its own definition that is even more stringent: “A non-EU company is ‘dumping‘ if it exports a product to the EU at a price lower than the normal value of the product. The normal value is either product’s price as sold on the home market of the non-EU company, or a price based on the cost of production and profit.”
Going even further the European Commission elaborates “Since December 2017 the EU has an alternative method to calculate dumped imports if state interference significantly distorts the economy of the exporting country”.
No other trading partner in the world can provide a more glaring example of state interference that the EU with its trade distorting agricultural support payments that by the EU Commission’s own admission accounts for 46 percent of farm income in the EU.
So here are the facts. The EU dumps frozen chicken cuts into countries like South Africa. These chicken cuts are essentially waste product since Europe banned the feeding of chicken cuts to animals in the wake of the BSE crisis. Consumers in Europe want white meat. There is little or no market for thighs and legs. So shipping frozen cuts to Africa is a creative and cost effective way to be rid of what is essentially waste products for EU chicken producers, As long as the price paid exceeds either shipping or disposal costs, EU chicken producers profit handsomely from dumping chicken cuts into South Africa and other markets. And they are heavily subsidized to over-produce.
According to data from the EU market access data base and published in a paper by Paul Goodison the landed price of frozen cuts from the EU is 0.90 per kg. Additionally according to a study done by Waginengen University, Europe’s foremost agricultural university production costs in the EU are 1.52 EUR per kilogram. This is higher than production costs in other poultry producing countries but EU state interference through its subsidy programs and trade barriers preventing import competition ensure profitability.
By any definition chicken dumping by the EU is an open and shut case.
