File photo: Ayanda Ndamane / African News Agency (ANA)
The SA Poultry Association (Sapa) has noted claims by the head of the Brazilian embassy’s trade and investment section, Bruno Neves, that Brazil “did not practise dumping” (“Brazil officials slam ‘dumping’ claims”, Cape Times, April 4).

This follows after the Namibian and South African poultry industries have jointly expressed concern about the flooding of these local markets by cheap Brazilian imports, which threaten African jobs and the existence of local industries.

Mr Neves backs his protestation by stating that “southern African countries are valuable partners for Brazil”.

That is one statement in a flawed argument that cannot be denied the southern African market has increasingly become a convenient repository for millions of tons of unwanted bulk-frozen chicken leg quarters that are the by-product of Brazil’s lucrative exports of white breast meat to the US and the EU, where consumers pay a premium for these cuts.

Mr Neves states categorically that it was “previously demonstrated at the World Trade Organisation (WTO)” that Brazil does not practise dumping, which is simply untrue.

The fact of the matter is that back in 2012, the International Trade Administration Commission already found enough evidence of dumping that it twice recommended the imposition of anti-dumping duties on whole birds and boneless cuts from Brazil.

When Brazil challenged this decision at the WTO, the case was not “dropped” as Mr Neves and his colleague Francisco Turra of the Brazilian Association of Animal Protein claims.

Rather, it was decided for precisely the reason of partner nation neighbourliness not to pursue anti-dumping duties, but to opt for a review of the Most Favoured Nation (MFN) duty instead.

In the intervening years, Brazil has been taking advantage in a most unneighbourly fashion, ramping up exports until 61% of all chicken imports now come from Brazil, and selling at prices that Sapa believes to be between 100% and 190% lower than it charges other countries and much lower than the actual cost of production.

If that is not dumping, Mr Neves might want to explain what is.

Mr Neves and Mr Turra find it “offensive” to be challenged, and offer up the fact that only around 500 000 tons of chicken consumed in South Africa are imported from countries such as Brazil.

Let it be noted that this represents around 24% of the entire market.

This also represents a bigger volume than the output of even the biggest single South African producer.

If you bear in mind that the EU, for instance, keeps imports strictly within 7% of market volumes, it is preposterous that Mr Neves can expect South Africa to simply nod and accept over three times more.

But if you consider that Brazil currently is the source of 61% of all those imports, it makes sense why Mr Neves is protesting so much. Who is being protectionist now?

What is at issue here is the damage that dumping does. Dumping prevents expansion, inhibits job creation, and stops emerging farmers from entering the market and becoming landowners.

This is the experience in South Africa, and now also in Namibia, and no amount of posturing about the importance of trade partnerships can change that.

The recent BFAP competitiveness study proved that South Africa has a globally efficient industry; yet Brazilian chicken floods our market in such volumes that it exceeds the production of even the biggest local producer.

This is not “complementing local production” as Mr Neves and his colleague claim, this is doing material damage to an industry that is a significant provider of employment and food security in South Africa.

The Namibian industry, being only six years old, faces the prospect of never reaching sustainability in the face of the deluge from Brazil, which ironically allows hardly any imports into its own market - surely to protect its own overproducing farmers.

True partnership goes both ways. What is playing out between Brazil and southern Africa is skewed in favour of one country and one country only, and that cannot remain unchallenged.

CAPE TIMES