ONCE again, I am obliged to correct the misstatement of facts in David Wolpert’s latest letter (“SA poultry magnates hold Agoa hostage, Business Report, 23 March).
From the outset, it is essential to record that the South African Poultry Association (Sapa) represents the majority of producers in the local poultry industry, most of whom are small and medium producers. From large commercial producers and middle-sized enterprises, through to smallholder farmers and a rapidly growing class of emerging farmers from previously disadvantaged communities, poultry magnates we are not. This title is more appropriate to the handful of multi-millionaires who have made billions from cheap imported poultry.
As far as African Growth and Opportunity Act (Agoa) stands, it is not us holding the renewal hostage, but the Americans, who have brought a non-Agoa matter into the negotiations. This has hijacked the process to avoid the forums of the World Trade Organisation (WTO), where any contestation of the South African chicken anti-dumping duties belongs. Perhaps Wolpert should encourage the US government to do what is right rather than conflate Agoa with an unfair trade instrument dispute?
Wolpert also fails to understand the China case. What the WTO panel found (a ruling which is being appealed by the Chinese) is that using both the books of account and a constructed cost approach are appropriate. However, to use the constructed cost approach you must give good reason for so doing. In addition to other procedural errors, China was found not to have given good reason. That is certainly not the same as saying the constructed cost method cannot be used, which he suggests. A procedural failure is not a substantive failure, and the method used by South Africa (and others) has never been tested on its merits at the WTO.
To assume the International Trade Administration Commission of South Africa is obliged not to use the constructed cost method at the next sunset review, shows a misunderstanding of international trade law. Each case turns on its own facts and in this case there are no “WTO facts” to use as a comparison. The primary logic is intact: you have to have a whole chicken before you can have parts of a chicken, and to say that when cutting up a chicken some parts suddenly cost less per kilogram than the whole chicken is an illogical and farcical approach.
Kevin Lovell
Chief executive
The South African Poultry Association