Trade-related analysis on poultry imports from USA

Genesis has become an important source of independent analysis and advice to the South African Poultry Association (SAPA) and, through these engagements, also to decision-makers in South Africa’s International Trade Administration Commission (ITAC), the Department of Trade and Industry (the dti) and the Department of Agriculture, Forestry and Fisheries (DAFF).

Over the past three years, we have helped ITAC to understand the potential impacts on domestic prices and consumers, and also on domestic poultry producers arising from SAPA’s tariff and anti-dumping applications against imported poultry products. Our work has also shaped and developed all stakeholders’ understanding of the conceptual underpinnings of the trade remedies available in South Africa’s Trade, Development and Co-operation Agreement (TDCA) with the European Union (EU).

In these various work streams, Genesis has modelled the transmission mechanism between higher tariffs, domestic prices and consumer welfare, as well as the average return on capital employed by domestic producers to be able to continue investing in their businesses. These analyses have generated a clearer understanding of the trade-offs between different types and levels of import protection. They have also assisted ITAC in its consideration of various objections raised by the importers and retailers who contested SAPA’s tariff and anti-dumping applications, many of which were speculative rather than evidence based.

Genesis also provided the dti with evidence-based analysis of the potential impacts of the USA’s decision to make South Africa’s continued inclusion in the African Growth and Opportunity Act (AGOA) contingent upon USA poultry producers gaining greater access to South Africa’s poultry market. This informed the dti’s negotiating strategy with representatives of the USA government, including the magnitude of the import quota eventually granted to USA producers. The objectives of this work required a thorough investigation of existing general equilibrium models to show the impacts on South African poultry producers and consumers of allowing USA poultry imports into the domestic market, as well as a rigorous analysis of the nature and extent of the potential harm to South African exports to the USA should AGOA preferences be revoked.

Genesis continues to provide economic advisory to SAPA on an ongoing basis. More recently, our team has been involved in assisting SAPA and the DAFF understand the impact of proposed brining regulations on domestic poultry producers and consumers.