South Africa’s chicken, tyre, and potato chip price war

The government is actively implementing trade policies, particularly anti-dumping duties and import tariffs, that make basic goods more expensive for local consumers while not protecting South African producers through unfair implementation.

Xa International Trade Advisors director Donald MacKay told 702 that the government’s anti-dumping duties have resulted in South African consumers paying more for basic goods such as frozen chicken, tyres and potato chips. 

The Department of Trade, Industry, and Competition (DTIC) has been reluctant to use other tools at its disposal to address unfair competition by foreign companies’ dumping’ their products in South Africa. 

Dumping occurs when a country or company exports a product at a lower price in the foreign importing market than the price in the exporter’s domestic market, effectively undercutting local producers. 

South Africa has been a victim of dumping from China, Brazil, Pakistan, and the European Union in recent years. 

In response, the country has been one of the top five users of global anti-dumping duties to protect local manufacturers from excessively cheap foreign alternatives. 

However, MacKay said such measures should only be a last resort as they are largely ineffective over the long term and may facilitate corruption. 

In South Africa, anti-dumping duties are applied on an individual basis, which typically results in trade merely shifting to the company with the lowest duty applied to it rather than trade moving to local producers or stopping entirely. 

President of China Xi Jinping

Some private-sector companies have engaged the government to apply anti-dumping duties uniformly across foreign imports of particular goods. 

MacKay said the government is well aware of the problems and economic inefficiencies caused by anti-dumping duties. Still, the issue has proven difficult to address politically due to the number one culprit being China. 

The DTIC, so far, has selectively applied anti-dumping duties to avoid angering its largest trading partner and fellow BRICS member. 

This results in anti-dumping duties on relatively small players and markets, which either have minimal local competition or are not large enough to make any impact on dumping. 

Furthermore, the South African market is not large enough for the government to impose its will on foreign companies. 

Thus, “We have not seen any kind of movement to remedy our problems,” MacKay said. 

The DTIC has other tools in its arsenal which may prove more effective in stimulating local production and preventing unfair foreign competition. 

Some solutions include subsidies for local manufacturers to make their products more price competitive in South Africa and globally. 

However, the South African government does not have the financial muscle to compete with more developed economies and the subsidies they can provide their manufacturing sectors. 

A more attractive solution is an anti-subsidy measure in the form of an import tariff, which will cancel out subsidies given to foreign companies by foreign governments to make their exports cheaper. 


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