TRALAC - Trade Law Centre

South Africa could lose billions in 'chicken war'

Sunday, 28 December 2014 Published: | Jan-Jan Joubert

Source: Sunday Times (South Africa)

South Africa stands to lose billions of rands if a prominent US senator keeps his promise to do "everything in his power" to ensure that South Africa does not continue to benefit from the Africa Growth and Opportunity Act when the US Senate writes a new version next year.

Senator Chris Coons, a Democrat from the poultry-producing state of Delaware, told Sunday Times this week that he would demand that anti-dumping measures on poultry products be scrapped by South Africa if the country wished to keep benefiting from the act.

South Africa's exports under the act were valued at $3.6-billion last year, and created 62395 jobs, according to the Department of Trade and Industry.

The South African anti-dumping measures on US poultry products have been a long-standing issue. Coons, chairman of the Senate foreign relations subcommittee on African affairs, will co-author the new version of the act.

"I support Agoa and hope to negotiate a fair path forward, but South Africa cannot expect to continue to reap the benefits of increased trade without playing by the rules," he said. "They can't expect us to open our markets but they will not open theirs. If South Africa insists on maintaining its long-standing and illegal anti-dumping duties on American poultry, I will do everything in my power to ensure they do not continue to benefit from Agoa."

Coons's spokesman, Ian Koski, added: "Instead of trading with us fairly, South Africa has blocked American poultry while allowing poultry imports from other nations. That's not a level playing field."

The World Trade Organisation ruled against China for its almost identical policy earlier this year, Koski said.

Coons is expected to chair the subcommittee until next month, when the Republican takeover of the Senate will take effect. His likely replacement, Senator Johnny Isakson, a Republican from Georgia, another major poultry-producing state, shares his views. Coons is expected to remain on the committee as a ranking member, and Isakson and Coons are expected to use the rest of the act's benefits as leverage to make South Africa budge.

Sidwell Medupe, spokesman for the Department of Trade and Industry , said South Africa wanted the renewal of the act for at least 15 years without any new and onerous criteria and with South Africa included as a beneficiary country.

This was crucial for Africa's regional economic integration efforts, he said. "We also call for the expansion of Agoa to include other products and the relaxation of the rules of origin under Agoa to ensure better market access of products into the US."

Medupe said South Africa had imposed an anti-dumping duty on bone-in chicken pieces after an investigation by the Board on Tariffs and Trade before the International Trade Administration Commission of South Africa was set up. The commission later conducted two review investigations on the continued need for the anti-dumping duty, in line with WTO rules.

Medupe said the US poultry industry's concerns regarding anti-dumping duties were being discussed between South African and American poultry producers, as well as by the two governments.

 

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