Heated debates over imported frozen food from fellow BRICS country

The proverbial feathers are flying around the lack of anti-dumping duties against frozen bone-in chicken portions from fellow Brics country Brazil.

While local producers claim imports have skyrocketed by 600% from the date the anti-dumping duties should have been in place, importers claim there has been a material decline during the same period.

The International Trade Administration Commission (Itac) investigated the import actions of several countries and found that Brazil, Spain, Poland, Ireland and Denmark were dumping chicken in the Southern African Customs Union area, causing material harm to local poultry producers.

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Chicken from Brazil

Around August last year Itac recommended the implementation of anti-dumping duties against the countries, but Minister of Trade, Industry and Competition Ebrahim Patel decided to suspend the implementation by 12 months.

He blamed high food prices for his decision not to implement the anti-dumping duties to protect local producers. The 12 months is now almost up.

However, it is unclear what the minister will do given the fact that South Africa is hosting the rather contentious Brics Summit during August. Brazil is a Brics member.

The outbreak of bird flu in several European jurisdictions prevented imports from the other countries, but Brazil has been able to continue exporting to SA.

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Stats battle

FairPlay, a non-profit movement to end predatory trade, wrote in June this year that imports from Brazil increased sixfold from August 2022 to April this year.

ChickenFacts, the mouthpiece of the South African Meat Imports and Exporters Association (Amie), responded by saying FairPlay produced false statistics to push for higher tariffs.

FairPlay argued that imports rose from 572 tonnes in August last year to 3 530 tonnes in April this year (the latest available statistics). The increase in imports when these two months are compared amounts to 517%.

ChickenFacts says the figure for August 2022 represents a month with a low import volume, which was then simply compared with statistics for April, which had a high volume of imports.

It says FairPlay “conveniently” ignored all the differing monthly volumes in between.

ChickenFacts published statistics from the South African Revenue Service from January 2021 to April this year, stating that it is “easy to see that imports have actually declined by more than a third in that time” (see below).

FairPlay in its reply to the ChickenFacts response acknowledges that chicken imports have been declining over the past few years since a 2018 peak, but insists that the trend is now reversing.

“… it looks like Brazilian poultry producers have been raising bone-in chicken volumes this year in anticipation of these delayed anti-dumping duties coming into effect in August.”

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Veggies from China

Meanwhile earlier this week, Patel sent Itac back to the drawing board with its investigation into the customs duty rate on frozen mixed vegetables, apparently imported mainly from China.

Local producer Nature’s Garden applied in 2018 for an increase from 10% ad valorem to the World Trade Organisation’s bound rate of 37%. Itac initiated its investigation in February 2019.

Its “full-scale investigation” culminated in a final recommendation to Patel.

Patel referred the matter back to the commission, apparently requiring clarification and expansion on certain aspects relating to the “proposed increase in the rate”.

“The minister raised concerns with regard to the matter of pricing,” Itac says in general notice published on 30 June this year, adding that he then requested the commission investigate his concerns about the impact of the increased duty on the lower segment market and the possible impact on food inflation.

“Itac’s findings were submitted to the minister, for his consideration,” the commission says in its general notice.

However, he took a number of issues into account, such as high food prices and the continuing pressures on household incomes, and rejected the application – telling Itac to review the customs duty in nine months’ time and to submit a new report with recommendations.

Itac has thus been sent back to the drawing board not once, or twice, but three times:

  • First to give clarification;
  • Then to address Patel’s concerns; and
  • Now to wait nine months and then start afresh

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Investigation took nearly four and a half years

XA Global Trade Advisors director Donald MacKay says the whole investigation took a marathon of 53 months. Yet no one is the wiser as to when Itac made the first recommendation, or what the new findings were when they were sent back to the drawing board.

“According to Itac, a tariff investigation should be wrapped up within six months of initiation,” he says.

“This is a perfectly achievable objective, but instead it takes on average 22 months and if you are Nature’s Garden, it took 53 months for this to wrap up [47 months overdue]”.

MacKay notes that the information submitted by Nature’s Garden (for the tariff increase application) went back to 2015.

“In theory the duties could have increased and decreased in the time it took. This is what an agile trade policy is all about.”

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

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