According to reports, the Economic Freedom Fighters (EFF) called on Trade and Industry Minister, Rob Davies, to impose a 50% tariff on all chicken importers to protect South African poultry farmers and their workers. The Democratic Alliance’s Shadow Minister of Trade and Industry, Geordin Hill-Lewis, discusses the complexity of the matter with Justmoney writer, Alina Hardcastle.
In the letter addressed to Davies, EFF leader, Julius Malema, states that the massive oversupply of poultry imports has made it impossible for local chicken producers to continue to operate, let alone compete internationally.
Hill-Lewis explains that if there is any evidence of dumping, which is defined as a situation of international price discrimination under the World Trade Organization (WTO) law, then it’s relatively easy to impose a protective anti-dumping duty for a specific time.
However, if there is no conclusive evidence of this, then the matter is far more difficult. “It is not wise or sustainable over the long term, to simply protect local industries because they are struggling to compete with their global competitors,” says Hill-Lewis.
He acknowledges the negative impact this tariff would have on both consumers and stores; and feels that a matter such as this requires conclusive evidence.
Hill-Lewis concludes: “If [chicken producers] cannot compete because of government subsidies or some other unfair trade practice in those countries, then that evidence must be presented and then action can be taken in terms of WTO law. But it is not good enough to protect merely to compensate for a competitiveness deficit.”