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Davies optimistic SA, US poultry producers will reach agreement

Davies optimistic SA, US poultry producers will reach agreement
Minister Rob Davies
Published date:
Friday, 10 April 2015
Linda Endsor

Trade and Industry Minister Rob Davies is optimistic that the current deadlock in the negotiations between South African and American poultry producers about the latter being granted greater access to the local market will be overcome.

A resolution to the impasse is vital to get the full backing of the US Congress for SA’s inclusion in the renewal of the African Growth and Opportunity Act (Agoa), a system of nonreciprocal preferences which provides duty-free access to a range of products from sub-Saharan countries into the US. The act expires at the end of September.

So far, the US poultry producers have rejected the offer made by the South African Poultry Association as being insufficient.

"I think we are making progress and are working to find a win-win solution," Mr Davies said at a media conference on Friday.

US poultry producers want SA to lift the antidumping duties on their chicken products which they say put them at a competitive disadvantage.

Mr Davies said the negotiations were about deciding what tonnage of US chicken would be free of antidumping duties.

Mr Davies will lead a delegation of senior government officials and business and labour representatives to Washington next week to participate in the Trade and Investment Framework Agreement Council meeting with the US trade representative. During the visit, they will be pushing for the renewal of Agoa, with SA included for a 15-year term.

Mr Davies said that the benefits of Agoa were two-way, having created an estimated 100,000 jobs in the US and 350,000 direct jobs and 1.3-million indirect jobs in sub-Saharan Africa. of which 62,000 were in SA.

Mr Davies said the poultry issue remained a challenge for both countries. "This is because of the peculiar nature of the market in the US. US consumers prefer the white meat (chicken breast) and tend to sell the brown meat (chicken legs) to other countries, such as SA," he said.

"The low price of the chicken legs, however, tends to undercut the local South African producers, reducing local production and jobs. Poultry has been identified as an important sector for further development in the Agriculture Policy Action Plan that was agreed to in Cabinet," said Mr Davies.

"The attitude of the South African government remains one of constructive engagement on all the concerns raised by the US constituencies," he said.

The government has left the two poultry associations to come to an agreement.

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