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South Africa imposes preliminary anti-dumping duties on specific EU member states’ frozen poultry cuts

17 August 2014

Following an investigation by the International Trade Administration Commission (ITAC) into claims of dumping of frozen poultry parts by German, Dutch and UK exporters (see Agritrade article ‘ Continued growth projected for EU poultry-meat exports to Africa’, 24 November 2013), preliminary anti-dumping duties of between 22 and 73% were announced at the beginning of July 2014.

The imposition of the anti-dumping duties was welcomed by the South African Poultry Association, which maintained that the measures were in line with WTO standards and rules. The Association of Meat Importers and Exporters argued that the measures would “raise chicken prices”.

The provisional anti-dumping duties will remain in place until 2 January 2015. In the intervening period the concerned parties may make further submissions before a final ruling is made.

Meanwhile, Tralac (the South African-based Trade Law Centre) has posted a Discussion Note examining the international legal framework for the invocation of trade remedies, with specific reference to the poultry sector. The note highlights how the 2000 EU–South Africa Trade Development and Cooperation Agreement (TDCA) “contains its own trade remedy and dispute settlement provisions”. Anti-dumping and countervailing measures are dealt with in Article 23, with the language of this Article essentially reiterating WTO commitments, but committing the parties to seeking constructive remedies before “definitive anti-dumping and countervailing duties are imposed”.

Tralac also notes that the TDCA establishes its own dispute settlement arrangements under Article 104. This states that “any dispute relating to the application or interpretation of this Agreement” may be referred to the Cooperation Council which “may settle any dispute by means of a decision”. However, the Cooperation Council is a consultative, not an adjudication body, with the parties retaining “their right to refer disputes about the correctness of anti-dumping measures to the dispute settlement mechanism of the WTO”.

The Cooperation Council is established under Article 97, with a commitment to subsequently elaborating specific procedures, which should include appropriate methods of “forestalling problems which might arise in areas covered by the Agreement”.

The Tralac analysis argues that the Cooperation Council was not set up as the forum to ultimately rule on the correct application of the WTO rules and commitments on which the anti-dumping and countervailing measures provisions of Article 23 are based. It notes that “the relationship between WTO law and the TDCA is not explained in the context of the application of trade remedies.”

The analysis argues that should ITAC impose “anti-dumping measures on chicken imported from EU member states, a dispute is very likely to be declared”. The EC will then be faced with having to choose in which forum to take up this dispute – the decision made will give a useful indication how the Cooperation Council intends to operate. Tralac says it will “provide an important reminder as to how to formulate dispute settlement clauses in FTAs.”

In this context it should be noted that although the “bulk of the thorny issues” in the SADC–EU EPA have been resolved – securing improved access for SADC wine, sugar and fruit exports, and the EU having secured recognition for Geographical Indications – the final wording of the agricultural safeguard and a number of other provisions have still to be agreed.

Editorial comment

The problems arising from the disposal of chicken parts for which there is only a limited market in OECD countries is common to many ACP regions and is not limited to trade with the EU, so the outcome of South African efforts to invoke anti-dumping provisions in its trade with the EU under its bilateral trade agreement will be followed with great interest in other ACP regions.

Given the role of the Cooperation Council in “forestalling problems”, the question arises: if the SADC–EU EPA process is completed and this new agreement takes precedence over the TDCA, what will happen to the Cooperation Council? Presumably it will need to be reconstituted to take account of the expanded membership of the underlying agreement. In this context, it is unclear what role the Cooperation Council could play in resolving the emerging poultry sector dispute.

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