South Africa - Brazil Trade Partnership Hits Potholes

As the five members of the BRICS group of emerging economies – Brazil, Russia, India, China and South Africa – tighten ranks and seek to expand their global influence, the inevitable trade spats have begun.
A decision last month by South African Trade and Industry minister Rob Davies to pursue a general tariff increase on chicken imports in response to concerns that Brazil is “dumping” the product could also hit Argentina, a leading trade expert here has warned.

Duane Newman, director of the Johannesburg-based Cova Advisory, explained that Argentina and Brazil, both of which export significant quantities of chicken to South Africa, are the main countries without free trade agreements with Pretoria to protect them from the planned tariff hike.

“There could be some unintended consequences from Minister Davies’ decision not to target just Brazil with anti-dumping duties, but to raise the tariffs,” explained Newman.

Report reveals systematic ‘dumping’

An investigation of the chicken trade between the two countries from 2008 to 2010, conducted by the International Trade Administration Commission (ITAC), confirmed allegations that Brazil was dumping whole chickens and boneless cuts of chicken on the South African market.

The ITAC’s findings made a strong case for Pretoria to slap ‘anti-dumping’ duties on the South American nation.

According to the ITAC’s report, anti-dumping duties can be imposed when there is a price difference between sales in a producer’s own market and prices charged on exports, when there is material injury to producers in the importing country and when there is a causal link between the imports and the damage.
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