By François Baird, founder of the FairPlay Movement. This article was originally published in FairPlay’s 2023 annual report.
Amidst a tumultuous year, FairPlay’s advocacy for fair trade reached a critical juncture, as we fought against dumping threats on the South African poultry industry and confronted government proposals that could impact local jobs.
FairPlay has operated now for seven years, and every one of them has been busy. We’ve had another active year in 2023, particularly on trade issues threatening the South African poultry industry.
Since our founding in 2016, the FairPlay message has been consistent: international trade must take place within the rules set by the World Trade Organisation (WTO). Dumping contravenes these rules and is not fair trade.
Where dumping and resultant harm to local industries have been proven, anti-dumping duties must be applied.
Allied to this has been FairPlay’s support for local jobs, both job creation and the prevention of job losses, and the plight of local communities who are further impoverished by the jobs losses that dumping brings. We have campaigned for Vat-free chicken, and for increased food security, because of the benefits to low-income households.
FairPlay has campaigned for Vat-free chicken since 2018. This year the proposal earned media support and a renewed trade union endorsement, and then MPs in parliament’s finance portfolio committee voted for an expansion of the Vat-free food basket. We will continue the campaign in 2024.
Messages of jobs, food security and help for the poor predominated at the start of 2023, as food price inflation remained high and poor families struggled to put food on the table. Food security remained a high priority, but the second half of the year was marked by dumping-related issues.
Dumping came up in two different forms in 2023. The campaign by importers to prevent anti-dumping duties being imposed on Brazil and four European Union countries was followed by a government proposal to condone dumping by cancelling or refunding general tariffs and anti-dumping duties on imported chicken.
The issue of anti-dumping duties came to a head in the months leading up to August 2023. The South African poultry industry, which for decades has been hammered by dumped chicken imports, secured anti-dumping duties against Brazil and other countries in 2022. However, the government suspended the imposition for a year, saying it feared the possible impact on food prices.
As the August deadline approached for that suspension to end, chicken importers launched a campaign for a further suspension. Seizing on food price sensitivities, they made exaggerated claims about retail prices, which they said would skyrocket if the new duties came into effect.
FairPlay exposed the exaggeration – the poultry industry had shown that any duty-related increases would be minimal – and opposed any further delay in imposing anti- dumping duties. Dumped imports were causing additional harm to an industry already in distress because of South Africa’s power cuts and infrastructure failures.
FairPlay’s argument was that the anti-dumping duties were necessary, and should have been implemented a year previously. WTO rules are meant to be applied, not suspended.
The duties were imposed, but poultry producers did not have long to celebrate. A new threat emerged – a government proposal for a temporary rebate on general import tariffs, as well as anti-dumping duties. South Africa’s trade regulator, ITAC was asked to investigate the possibility because of the government’s belief that the bird flu outbreak would cause a huge chicken shortage and more imports would be needed to fill the gap.
The government might be mistaken, but chicken importers loved the rebate idea. This time their focus was not on anti-dumping duties, but on the much higher general tariff increases imposed in 2020. Reverse those increases, importers said, so we can import more chicken. FairPlay has pointed out consistently that it is importers, not consumers, who will benefit from the importers’ proposals on tariffs and rebates.
Like the tariff suspension proposal, the importers’ argument for tariff rebates was both exaggerated – there will be no huge shortage, so there is no need for a huge increase in imports – and self-serving.
Higher import volumes will give importers higher profits, and lower import prices will give them the opportunity to increase their margins. In a submission to ITAC, and in statements and interviews, FairPlay said rebates were unnecessary and that removing the tariffs, even temporarily, would threaten local producers and local jobs.
The SA Poultry Association (SAPA) told ITAC that rebates would not be needed to encourage increased imports. No shortfall was expected and, even without incentives, imports would rise to meet any shortfall that did occur.
SAPA is rightly concerned about the impact of a flood of subsidised chicken imports, which it said would be potentially devastating for local poultry producers.
By early December 2023 there had been no announcement on whether or not the import tariffs would be imposed. That, in any case, would have been too late for imported chicken to reach the market by Christmas as the government had proposed.
FairPlay hopes that this means the government has abandoned a scheme that is both ill- considered and unworkable.
If it has, the removal of the threat of incentivised imports will help the poultry industry to recover in 2024 after the worst year in its history, caused by high input costs, load shedding
and the loss of millions of chickens due to mandatory bird flu cullings.
For FairPlay, abandonment of the rebates proposal would mean that the trade issues we targeted in 2023 both ended in the decisions for which we had campaigned. That gives us new vigour for 2024.
