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Tuesday, 30 May 2017

PROTECTION OF THE POULTRY INDUSTRY SHORT-TERM SURVIVAL NOT LONG-TERM ANSWER

While the outbreak of Avian Flu in Europe may offer some relief to South Africa’s poultry industry over the next few months, brooding over the possible outcomes of the current crisis continues – especially when it comes to the impact of European Union (EU) imports and chicken dumping on the industry. Calls for increased import tariffs, safeguard duties and a more protectionist stance have been both lauded by industry stalwarts and criticised by advocates of liberalised trade policy. While often-emotive calls for protectionism have been rejected by staunch proponents of free trade, citing increases in consumer prices and a breakdown of trade relationships as major concerns, fair-trade supporters have highlighted the importance of some form of protection to ensure the sustainability of South Africa’s developing and emerging economy. Both sides have convincing arguments. Free trade supporters call for the free flow of products between nations, and reject any form of trade barriers, including tariffs. Some, including AGOA, argue that imposing tariffs and duties on imported poultry restricts trade between South Africa and external markets, and places unnecessary financial burden on economically disadvantaged South Africans by preventing access to competitively priced poultry. In contrast, proponents of fair trade see current EU imports as an unfair trade practice and insist that protective measures are needed to prevent exploitation and to ensure the survival of South Africa’s poultry industry. Protective measures are not new to the industry. Following dumping and tariff investigations in 2012/13 the International Trade Administration Commission (ITAC) increased tariff duties on a number of frozen chicken products. A February 2017 Department of Trade and Industry (DTI) report highlighted tariff increases from 18% to 37% for bone-in chicken portions, and from 27% to 82% for whole birds; the maximum tariff allowed according to SA’s commitments with the World Trade Organisation (WTO). These increases applied to all imports from all countries, with the exception of EU and Southern African Development Community (SADC) trading partners who currently enjoy free-trade agreements with South Africa.

Source: R news