US urged to join Brazilian WTO challenge to South African poultry tariffs
12 August 2012
US poultry producers have called on the US government to join the Brazilian case against South African anti-dumping duties on poultry meats, maintaining that what they term the ‘same flawed theory’ that Brazilian exporters were challenging had been used to impose ant-dumping duties on EU poultry exports since 2000 (see Agritrade article ‘ Debate intensifies over South African poultry tariff policy’, 3 March 2012). US poultry industry representatives stated in their letter to the US Trade Representative that exports of US bone-in chicken ‘would increase to 127,000 tonnes annually’ if the South African poultry market were opened.
The Brazilian poultry industry claims that the South African Poultry Association ‘grossly overstated official import statistics’ in making the case for anti-dumping duties. However, the South African International Trade Administration Commission (ITAC) refutes the allegations that it used ‘incorrect data’, saying ‘the statistics were obtained from the South African Revenue Service’.
These exchanges need to be seen against the global background of a projected 2% increase in global production of poultry meat in 2012, and a projected 3% increase in global imports. Most of the growth in production will be in Asia, while Russian production is set to expand by 6% following recent investments, and a slight increase in EU production is expected.
In Southern Africa, poultry meat producers in the region are implementing plans to supply their own markets. Namib Poultry Industries has opened a new plant at Klein Okapuka, capable of supplying the whole of the Namibian market for poultry meat, and has launched a range of branded Namibian poultry products. However, the new facility has led to the invocation of infant industry protection under the relevant SACU provisions (see Agritrade interview ‘ Trade policy and the development of a new integrated poultry operation i...’, 12 November 2011).
It is unclear whether the US government will take up the calls of US poultry producers, given that a new Trade and Investment Framework Agreement was signed between the US and South Africa in mid June. This ‘aimed to deepen the bilateral trade and investment relationship and provide a forum to address trade issues’. In 2011, the value of US exports to South Africa grew by 29.5% to US$7.3 billion, while South African exports to the US grew by 15.7% to US$9.3 billion.
Editorial comment
If the US decided to join the Brazilian WTO poultry panel case against South Africa, this would raise the stakes from an ACP perspective, since it could lead to similar cases against other ACP governments that use high levels of tariff protection and other supplementary duties to nurture domestic poultry industries.
It would also raise issues related to the internal functioning of certain SACU trade policy tools, with infant industry protection having recently been invoked by Namibia in the poultry sector as part of a policy of nurturing an expansion of domestic Namibian poultry production. There is concern in Namibia that the infant industry protection measures adopted under the SACU agreement are increasingly being questioned by a number of sources, despite the locally perceived development benefits of the application of this policy measure.
While the recent trade and investment framework agreement between the US and South Africa would appear to suggest a US government preference for addressing trade issues through a process of bilateral dialogue rather than through the formal WTO process, it should be borne in mind that the issue of how to address the trade effects of US agricultural support measures was one of the main issues leading to the earlier stalling of trade and investment negotiations between the US and SACU.
