TRALAC - Trade Law Centre

South Africa: Tiptoeing around import quotas for US poultry

Wednesday, 28 January 2015 Published: | Nompumelelo Magwaza

Source: Business Report (South Africa)

The South African Poultry Association (Sapa) is trying to find common ground with US poultry exporters on how much US poultry should be allowed into the country.

A key issue for local poultry producers is to avoid US poultry imports from harming the local industry and jeopardising South Africa’s inclusion in the African Growth and Opportunity Act (Agoa).

The association’s chief executive, Kevin Lovell, said yesterday that the industry had already made an offer to its US trade counterparts and was waiting for some feedback from them.

Meaningless

The industry is under pressure from US exporters to end duties on poultry imports. They have threatened to block South Africa’s inclusion in the new US-Africa Agoa trade agreement, if the country does not comply.

Lovell said while Agoa was meaningless to the local poultry industry, “it is very meaningful to the automotive industry and other industry. It is good for the country as a whole.”

He said: “What we are offering will be harmful to the poultry industry, but for the greater benefit of South Africa (it) is worth trying to find some common ground.”

Without providing a figure on how much harm the US imports would have on the industry, Lovell said 10 000 tons of imported chicken was equivalent to 1 000 indirect or direct job losses.

“In order to assist South Africa to have Agoa renewed, the South African poultry industry is prepared to offer a quota of the US dumped chicken into South Africa,” he said. “How much of that chicken and on what terms it should be allowed into the country is what we are negotiating with US trade counterparts.”

He said the industry believed that the duties were lawful and if the US thought they were not lawful, the only way to resolve the matter would be to take it to the World Trade Organisation for dispute.

“The offering will be about allowing a volume-based import to enter the market and this will exclude the anti-dumping duties,” he said.

Lovell said the US poultry industry was using Agoa to try and challenge South African dumping duties.

The US was a major exporter of poultry to post-apartheid South, but stopped importing in 2000 after duties were imposed.

“During this time US export caused harm through company closures and major job losses in the poultry industry,” Lovell said.

In September 2013, the government increased tariffs on imports of Brazilian whole birds to 82 percent from 27 percent. In July, provisional duties ranging from 22 percent to 73 percent on frozen bone-in portions were imposed on imports from Germany, the Netherlands and the UK.

David Wolpert, the chief executive of the Association of Meat Importers and Exporters, said it supported Agoa and the opening up of poultry trade to the US. “This will be good for competition in the local industry, it will also bring the chicken prices down and it is also good for food security.”

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