TRALAC - Trade Law Centre

US raises AGOA issues over SA poultry sales

Tuesday, 07 April 2015 Published: | Linda Endsor

Source: Business Day (South Africa)

South African and US poultry producers have so far failed to agree on a mutually acceptable volume of imported US chicken which could enter SA free of antidumping duties.

This despite pressure that the parties reach an accord ahead of the renewal of the African Growth and Opportunity Act (Agoa).

The US congress has to pass a new act before the current one expires on September 30. Further talks between South African and US government officials on the issue will take place over the next few weeks.

US senators John Isakson of Georgia and Chris Coons of Delaware — both from chicken producing states — have insisted that their support for SA’s inclusion in a renewed Agoa hinges on greater access being given to US chicken imports into SA.

Such imports are now subject to antidumping duties. The senators argue that SA needs to make concessions if it wants to benefit from the duty-free access into the US market. Agoa provides for an extensive list of goods from sub-Saharan African countries.

But South African Poultry Association CEO Kevin Lovell said the parties were still far apart.

The extent of the disagreement is that whereas in terms of SA’s proposal the local poultry industry would shrink by about R800m as it gives room to imported US chicken. Under the US proposal the loss would be about R2.1bn.

Mr Lovell said in an interview on Monday the discussion hinged on what was a "reasonable" concession that could be expected from local producers.

"It is not about numbers. It is about understanding what is reasonable and the numbers will follow from that."

The South African association believes it would be reasonable to allow in the volume of chicken originally allowed in with an allowance to cater for industry growth.

Mr Lovell said the disagreement was over the volume of imported US chicken which would be subject to a rebate on the anti-dumping duty. The South African Poultry Association improved its original offer and raised by 50% the annual tonnage of allowable imported US chicken it would accept free of antidumping duties. However, the US industry rejected this as insufficient.

Mr Lovell is due to meet representatives of the US export council in Europe next week on the sidelines of meetings of international chicken producer associations.

Officials from the Department of Trade and Industry will travel to Washington next week for talks on the trade and investment framework agreement between SA and the US and are expected to raise Agoa issues with US officials. They will be followed later by Trade and Industry Minister Rob Davies.

Ministerial spokesman Sidwell Medupe said a press conference involving Mr Davies as well as representatives of business and labour to discuss the question of Agoa was planned to take place on Friday.

Both the US and South African governments have left it to their poultry industry associations to come up with a mutually acceptable agreement.

Mr Lovell said that the talks between the two poultry associations was undertaken in order to expedite the process of getting approval from the International Trade Administration Commission (Itac) for a rebate. If no agreement was reached Mr Davies could not impose a solution. An application would have to be made to Itac and a lengthy process of public consultations would have to be held.

 

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