South Africa’s chicken importers are at it again. They have launched another attack on chicken import tariffs, which they want removed.
Key takeaways:
- Importers profit, consumers don’t: Importers pocket fat profits by selling cheap foreign chicken at standard local prices without lowering consumer costs.
- Local jobs and industry at risk: Removing tariffs would flood the market with dumped chicken, undercut local producers and threaten rural jobs.
- Pressure from US trade deals: The anti-tariff push aligns with US demands for lower trade barriers as South Africa renegotiates its trade agreement.
The anti-tariff campaign was set out in the newsletter ChickenFacts – mouthpiece of the Association of Meat Importers and Exporters. In essence, importers are arguing that chicken tariffs are no longer needed, and should go.
Of course importers want tariffs scrapped – more chicken imports would mean more money for chicken importers. Because it’s profitable, they would happily replace local production and local jobs with imports that would boost foreign jobs.
Chicken importing is highly profitable business, because low-priced and dumped imports are not sold in South African shops at low prices. They are sold at local market prices, yielding fat profits for importers and middlemen. Consumers don’t profit, but importers do.
There will be more anti-tariff agitation to come, because this is clearly a sustained campaign against the anti-dumping duties and general tariffs that apply to chicken imports.
It is a campaign that will run parallel with demands being made by United States trade negotiators as South Africa seeks a new deal with the US. The Americans have already secured a huge annual quota of chicken imports free of anti-dumping duties, and they are pressing hard for concessions on general tariffs as well.
If these campaigns succeed, wholly or in part, South African poultry producers would be in big trouble. A competitive industry that has rebuilt profitability after the devastations of a previous flood of dumped chicken and then the 2023 bird flu devastation would be at risk. So would thousands of local jobs.
Tariffs and anti-dumping duties are there for a reason.
Anti-dumping duties are applied in terms of World Trade Organisation (WTO) rules which prohibit countries selling goods elsewhere below the cost of production, or below the price they are sold for in the producing country. Anti-dumping duties are designed to correct this illegality and restore fair trade.
South Africa imposes anti-dumping duties on chicken imports from nine countries, because extensive investigations found that imports were coming in at dumped prices, harming local producers and threatening local jobs.
Removing them would revive that threat. No industry can compete with dumped imports.
General duties, known as Most Favoured Nation or MFN tariffs, apply to chicken imports from all countries except the European Union, the United Kingdom and South Africa’s neighbouring states. General duties are applied by virtually every country, and South Africa’s MFN tariffs are not exceptional.
They were increased in 2020 because South Africa’s trade regulator, ITAC, agreed with a submission from the local poultry industry that it was being undercut by increasing volumes of opportunistic imports of frozen chicken.
Again, removing the MFN tariffs would revive the threat to local production and local jobs.
Chicken importers say they support the local poultry industry. Their anti-tariff campaign would have the opposite effect.
