TRALAC - Trade Law Centre

South African poultry group targets US import quota

Wednesday, 22 August 2018 Published: | JOE BAVIER

Source: Reuters

The SA Poultry Association (Sapa) has filed a lawsuit seeking to force the government to suspend a quota that excludes some US poultry imports from an anti-dumping tariff, a senior official with the association said on Tuesday.

If successful, the move – a response to the Trump administration’s decision to impose tariffs on aluminium and steel imports – could put at risk duty-free access to the US market for nearly $2 billion (R28.6bn) worth of South African exports.

“We’ve pulled the trigger,” Marthinus Stander, chairperson of Sapa’s broiler organisation, told Reuters, referring to the legal action the association had threatened for more than a month.

Trade and Industry Minister Rob Davies acknowledged that the government had received the court papers relating to the lawsuit from the poultry group but declined to comment further.

South Africa levies a tariff on so-called “bone-in” poultry that it says is exported by major world producers, including the US, at prices below the cost of production.

But in 2015 the government agreed to a quota that allowed about 65 000 tons of meat from US producers to be imported tariff-free each year into South Africa.

South Africa agreed to the deal to preserve its benefits under African Growth and Opportunity Act (Agoa) – the US’s flagship trade legislation for Africa – which grants qualifying countries duty-free access to the US market for thousands of goods.

In 2017, more than $1.8bn in South African exports, including some now subject to tariffs of 25 percent on steel and 10 percent on aluminium imposed by Washington earlier this year, were covered by Agoa.

The South African government has tried unsuccessfully to persuade the Trump administration to grant it an exclusion from the new tariffs.

The poultry producers association said the US tariffs violated the agreement on the poultry quota.

“The quota should be suspended if any of the benefits that South Africa enjoyed at the time of the renewal of Agoa are suspended. This has happened to steel and aluminium which used to be duty-free under Agoa,” Stander said.

Others oppose Sapa’s position.

South African meat importers argue that ditching the tariff-free quota would drive up prices for the country’s consumers and likely provoke retaliation by the US poultry industry.

“I don’t think they’re going to take it sitting down,” said David Wolpert, chief executive of South African meat importers association AMIE SA, referring to US poultry producers. “I think they will lobby Congress immediately to take reciprocal action… There can be a domino effect.”

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