Wednesday, 24 March 2021

Fighting dumping is not protectionism

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Fighting dumping is not protectionism

First published in the Business Day on March 23.

Peter Bruce gets part of the chicken dumping issue right – dumping is unfair trade (Poor chicken industry, from a sweet to a sweat spot, Business Day 3 March).

What he gets wrong is vital: fighting unfair trade is not protectionism, nor is the poultry sector master plan “a fundamentally protectionist charter”. Countering dumping, through measures such as anti-dumping duties, is part of the World Trade Organization (WTO) regulations to ensure fair competition. Dumping is a transgression of the very rules to which the dumping nations have agreed and accordingly there is no such thing as good or bad dumping. The rule of law demands that rules and regulations are enforced and transgressors are held to account.

It is dumping – not fair imports, but dumped imports – that has damaged the local chicken industry, without real benefit to consumers. The master plan seeks to create a level playing field so that the local industry is resilient against unfair trade, including dumping, to allow it to recover, grow and create jobs.

Exports account for only 4% of local production, and doubling or tripling that is not going to save the local chicken industry, its 110 000 direct and indirect jobs and possibly 20 000 jobs in the grain industry. Local production is the key to survival and food security. Ask Ghana why their chicken is more expensive than steak in SA.

The dumping margins in the anti-dumping application Bruce cites are not based on producer costs in Brazil or the EU, but on the difference between what the product is sold for there and the import price in SA. They‘re probably selling below production cost, too, because they’re getting rid of unwanted surplus at any price they can get.

That’s not fair trade, and Bruce should join the fight against it.

Published by Archy Hlahla on behalf of Francois Baird, Founder, FairPlay.