Minister Patel has issued a directive to ITAC to review the tariff structure for poultry classifiable under tariff heading 0207.1 (all fresh and frozen chicken varieties).

According to the gazette, the Minister directed ITAC to

“review the entire tariff structure for poultry… taking into consideration, inter alia, the following aspects:

  • considering the introduction of specific rather than ad valorem customs duties;
  • considering simplifying the tariff structure by reducing the number of tariff lines for poultry in Schedule 1 to the Customs and Excise Act, Act 91 of 1964, by operating at a 6- digit, 7-digit or 8-digit level;
  • considering specific anti-dumping measures where appropriate and consider how these impact on the level of the ad valorem tariffs;
  • considering the introduction of an appropriate system of rebates whereby tariff levels on certain imports can be reduced where parties are achieving exports; and
  • considering the possibility of other measures, such as an entry price system.

This is almost verbatim from Pillar 5 of the SA Poultry Master Plan. 2 points are noted in the masterplan, which are not noted in the gazette though, being

  1. Reporting on the combined impact of discrete trade measures operating in the sector such as tariffs, anti-dumping measures, countervailing measures and preferential trade agreements (the first bullet point in section 5.2 of the masterplan).
  2. Considering the introduction of import licenses to support compliance and to collect statistical and other factual information on poultry imports to inform policy interventions (bullet point 5 in the same section).

The second point is not required. Import licenses are merely a technical barrier to trade (an artificial barrier created by government to protect the local industry, without the use of duties). Import licences are already required before any chicken imports can be made. These are administered by the Department of Agriculture, Land Reform and Rural Development (DALRRD) and if the DTIC wanted information on these permits, they can simply ask for it from DALRRD.

The additional tariff codes were requested by the local industry to allow for better collection of statistical data, so this too already exists. In fact, not only does it exist, it has been used in the anti-dumping investigation currently underway.

The first point is however important. Any response to the investigation of the tariff structure should be based, in part at least, on what the study has revealed on the trade measures already in place in the sector. There have been eye watering duty increases imposed a few months ago, a sunset review is currently underway on the anti-dumping duties on chicken imports from Germany, the Netherlands and the UK. There is also a new anti-dumping investigation in progress on bone-in chicken imports from Brazil, Denmark, Ireland, Poland and Spain and let’s not forget the bilateral safeguard duties imposed against chicken from the EU.

Oh, and then also the rebate of anti-dumping duties on 69 000 tons of chicken per annum from the USA.

It is not mentioned here, but we need to remember that DALRRD do not quickly re-open markets where there have been outbreaks of Avian Influenza. Just keeping the consumer safe you might be thinking, but that would be the finest nonsense. Keeping countries like the Netherlands closed for chicken imports is a deliberate decision taken by DALRRD to protect the domestic industry. They themselves put it in writing, so it is hardly contentious to state this.

Responding to this investigation is important and crucial to get right, even if important information is not currently available. Of course this is happening in the middle of an enormous anti-dumping investigation, so it’s important to request an extension and respond properly.

Contact us on info@xa.co.za to obtain assistance in responding.

The current deadline to respond is 15 April 2021.

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