Brazil-South Africa Trade Relations Threatened By ‘Chicken Dispute’
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Fellow-BRICS nations Brazil and South Africa are now locked in a bitter trade dispute over their respective poultry industries, said a report by the BBC on Wednesday.
The dispute arose after South Africa accused Brazil of dumping chickens on its market, forcing South-African farmers to cut jobs as they could not compete with Brazil’s “unfairly low” prices.
Fellow-BRICS nations Brazil and South Africa are now locked in a bitter trade dispute over their respective poultry industries, said a report by the BBC on Wednesday.
The dispute arose after South Africa accused Brazil of dumping chickens on its market, forcing South-African farmers to cut jobs as they could not compete with Brazil’s “unfairly low” prices.
Brazil, the leading poultry exporter in the world, however has denied this and is reportedly willing to take the matter to the World Trade Organization (WTO) for adjudication.
In the beginning of this year, the South African government provisionally imposed additional import duties on two categories of chicken from Brazil, after a report by the International Trade Administration Commission of South Africa (ITAC) claimed that Brazil had been exporting huge numbers of chicken into South Africa at unfairly low prices since 2008.
The import tariff expired last month, but Brazil now insists that the WTO should rule whether South Africa was wrong to impose the tariff in the first place.
[quote]”It is a big deal for us as Brazilians. We are not dumping, we are not undercutting. If we don’t take any action, we will be saying other countries are right in accusing us of dumping,” Brazil’s ambassador to South Africa, Pedro Luiz Carneiro de Mendoca, told the BBC.[/quote]On the other hand, the South African Poultry Association (SAPA) say its Brazilian counterparts are abusing their power as the world’s largest exporter.
Last year alone, close to 60 percent of all poultry imports into South Africa came from Brazil, reflecting a 40 percent year-on-year increase of Brazilian imports.
[quote]”We cannot afford to have chicken dumped in South Africa. Our people are losing jobs, our companies are losing profits. It will impact negatively on the country’s economy,” said Tumi Mokwene, a small-scale poultry farmer.[/quote]South African authorities say that close to 3,000 people employed in the poultry industry could lose their jobs in the next few months.
Astral Foods, the second-biggest chicken producer in the country also cut 150 jobs in recent weeks, while smaller producers have similarly hit.
“In our farm, we’ve had to change our business model in order to survive and in the process we had to tell some of our employers that we can no longer keep them on,” Mokwene added.
Siphamandla Zondi, head of the independent foreign policy think-tank Institute for Global Dialogue, told the BBC that the two countries must now come to a quick resolution in order to avoid further conflict and unrest.
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[quote]”Both countries are emerging economies and there are bound to be complexities in trade relations here but these need to be managed strategically,” said Zondi. “Brazil has got to look for new markets because the traditional markets have problems and that may hit South Africa where it hurts the most but that is the nature of international economic trade, it is about taking competitive advantage where you have it.”[/quote]
