South Africa: Poultry industry jitters over extension to US anti-dumping tariffs

23/11/2022 09:31 - 4 Views

The South African Poultry Association (Sapa) will have to continue to “take one for the team”, at least for the next 18 months, as the International Trade Administration Commission (Itac) conducts a sunset review of US anti-dumping tariffs, which expire tomorrow.

 

Earlier this month, Itac began a sunset review of the US’s tariffs on concerns by Sapa and poultry producers in the SA Customs Union (Sacu) area.

 

Itac decided the application had “sufficient evidence and a prima facie case” to justify an investigation on concerns  that the expiry of the tariff period without a new one in place could lead to percentage-based, or ad valorem anti-dumping duties such as those applied to other countries.

 

“This was a last-minute condition imposed by the US for its agreement to an extension of the Africa Growth and Opportunity Act (Agoa) trade agreement, which gave many South African industries duty-free access to the US market. For the benefit of these industries and the national economy, the poultry industry agreed to ‘take one for the team’,” Sapa-linked Fairplay said.

 

The current anti-dumping duty is R9.40/kg on imports of US bone-in chicken portions, such as frozen thighs and leg quarters. The percentages in the government gazette range from 175% to 279% for various chicken portions.

 

Itac’s communications manager, Thalukanyo Nangammbi, said: “In accordance with the anti-dumping regulations, all investigations by the Commission must be completed within 18 months from the date of the initiation of the investigation. The current anti-dumping duties will remain in place for the duration of the Commission’s sunset review investigation.”

 

Nangammbi said the Commission beat the deadline for the expiry of the current regime of anti-dumping duties by starting the investigation on November 9.

 

He said the Commission had invited producers and importers in the US to submit information to make a determination whether the expiry of the anti-dumping duties would likely lead to the continuation and/or recurrence of dumping of products originating in the US and the continuation and/or recurrence of material injury to the Sacu industry.

 

“Once the investigation has been finalised, the Commission will make a recommendation to the minister of trade, industry and competition who will make the final decision whether or not to impose anti-dumping duties,” Nangammbi said.

 

Since March 2020, US bone-in chicken imports have also been subject to a general tariff of 62% which, along with the R9.40/kg anti-dumping  tariff had assuaged Sapa, who felt it “adequate to limit US bone-in portions to close to the agreed quota”.

 

That quota, worked into Agoa tenements in 2016, is currently just just more than 71 000 tons of bone-in chicken and even after the 62% tariff it comes in at prices that are resented by the South African industry.

 

“The fact that US producers are selling off brown meat as unwanted surplus is highlighted in the sunset review application. Dumping happens because of the clear preference of US consumers for “white meat” over “brown meat”, a situation which Itac says it has itself verified in the past,“ local industry said.

 

Itac would not be drawn to comment on whether bilateral considerations come into play in the review of tariffs as the US has many trade-offs with South Africa.

 

Sapa said the suggestion, accepted by Itac, was to construct a “normal value” for US chicken portions based on the price for a whole broiler chicken as provided by the US Department of Agriculture. Whether US poultry producers and South African chicken importers will dispute this calculation remains to be seen.

 

“This leads to a problem: how do you calculate dumping by comparing selling prices of frozen chicken portions in the US and SA when US consumers don’t buy frozen leg quarters and other ‘brown meat’?” it said.

 

Source: Independent Online

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