The decision follows lobbying by the Brazilian Poultry Association (UBABEF), which argues that the provisionary surcharges — introduced in February — violate the World Trade Organisation’s (WTO) anti-dumping agreement.
After analysing documents and arguments from the poultry industry, Brazil formally consulted with the South African government but received no response. Brazil’s Chamber of Foreign Trade (CAMEX) has therefore decided to submit a formal consultation to the WTO.
UBABEF executive president Francisco Turra said: “If the issue is not resolved at the consulting stage, then a panel needs to be called. I am absolutely sure the outcome will be victory for Brazil, based on the total lack of support for the measures adopted by the South African government.”
The anti-dumping measures have affected the export of whole chickens and boneless chicken cuts, which are subject to 62.93% and 46.59% surcharges retrospectively. The surcharges are also added to regular import tariffs, which are 5% for whole chickens and 27% for boneless cuts.
Highlighting that the anti-dumping duty will have a negative effect on the processing industry that uses the Brazilian product, Turra said the knock-on effect will cause the already suffering consumer to face higher prices. The annual losses caused by the duty are currently estimated to be US$70m, which UBABEF hopes to reverse.
Turra said: “We tried the most varied means possible for negotiating with the South African government, from visits to the South African Embassy in Brazil to missions to Johannesburg. This is not a path I would like to go down, but there are no other alternatives regarding this injustice, which has resulted in annual losses of US$70m.”
Recent UBABEF data shows that 160,000 tonnes (t) of chicken was exported to South Africa in 2009. In 2010 it was 181,000t and in 2011 it was 295,000t. Boneless cuts accounted for 20% and whole chickens for 4% of exports in 2010.