Agoa.info - African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Poultry dispute threatens South African trade with US

Poultry dispute threatens South African trade with US

Poultry dispute threatens South African trade with US
Johannesburg, South Africa
Published date:
Sunday, 13 September 2015
Author:
NEANDA SALVATERRA

What came first, the chicken or the trade dispute?

The two have blurred together for U.S. negotiators holding $1 billion in South African exports hostage over Pretoria’s hesitation to allow American chicken farmers access to Africa’s most developed economy.

Trade officials from the two countries are meeting Monday in an attempt to assuage South Africa’s fears over an avian influenza outbreak in 15 states that has prompted the country to delay an earlier agreement to accept 65,000 tons of annual duty-free U.S. poultry imports.

Without those imports, the U.S. has signalled its willingness to exclude South Africa from parts of the African Growth and Opportunity Act, a trade framework that gives about 40 African countries tariff-free access to the U.S. market.

“I am concerned that we are not seeing enough progress and that market barriers persist,” said U.S. Sen. Chris Coons (D, Del.), who has been involved in the negotiations. “Congress has made clear that the United States should not allow other countries to enjoy trade benefits under AGOA while actively undermining our trading interests.”

chris coons 640px 

 Sen. Chris Coons

 

A U.S. official close to the negotiations said unless progress is made, South Africa’s car and citrus exports could bear the brunt of U.S. retaliation as the U.S. could suspend both those industries from AGOA, thereby subjecting them to tariffs and duties.

“There is a growing impatience with South Africa,” said the U.S. official. “They have been given chance after chance, frankly.”

The impact of an exclusion could add extra pressure to South Africa’s slowing economy, already struggling with tumbling commodity prices and a slowdown in China, a key trading partner. In 2014, the top U.S. import from South Africa was light motor vehicles valued at $1.3 billion. Additionally, the U.S. imported $41 million of oranges in 2014. A U.S. Department of Agriculture report noted that citrus exports from the Western Cape region in South Africa to the U.S. support 22,000 jobs that would likely be affected by a U.S. action.

A spokesperson at the Department of Trade and Industry in South Africa didn’t immediately return calls or emails seeking comment.

The fight over fowl began in 2000 when South Africa levied antidumping tariffs on U.S. poultry exports, choking off the flow of American poultry into the country, said U.S. exporters.

South Africa represents a small slice of U.S. poultry exports world-wide, valued at $5.5 billion, but U.S. exporters say they have missed out on supplying South African poultry consumption, which has grown 70% since 2000, according to the USDA. The U.S. only supplies about 3% of the country’s $340 million in annual poultry imports.

“We are upset not only [because] we’ve been blocked out of that market but it’s also the approach they have taken," said Michael Brown, the president of the National Chicken Council.

Industry experts say the South African poultry industry enjoys outsize political protection from the country’s government and is already under pressure from Brazilian and European exporters.

Joshua Meltzer, a fellow at the Brookings Institution, said protectionism of the type South Africa has attempted seldom work if the industry is inefficient. Ordinary citizens suffer because they end up paying for the higher costs, he said.

U.S. experts see the tussle over chicken as a litmus test in an important African market.

“We hope that countries are realizing that the AGOA lifeline will have an end date at some point,“ said Scott Eisner, vice president of African affairs at the U.S. Chamber of Commerce. “Those countries need to start thinking long and hard about how they enter into a robust trading relationship with the United States.”

Read related news articles

New government of national unity gives South Africa a honeymoon period for keeping its AGOA status, say analysts

New Trade and Industry Minister Parks Tau is fighting for South Africa's continued participation in AGOA at the AGOA Forum in Washington this week. The formation of the Government of National Unity (GNU) has secured South Africa a “honeymoon period” for retaining its privileged access to US markets under the African Growth and Opportunity Act (Agoa). This is the view of US politicians and South African trade analysts on the eve of the...

23 July 2024

South Africa plans US mission to lobby against US review of ties

South Africa’s newly formed government will use an upcoming forum on US preferential trade access to push back against a Senate review of ties between the two countries. The House of Representatives last month passed a law requiring a full assessment off bilateral relations and submitted it to the Senate for approval. South African business lobby groups have warned the legislation threatens to curb trade with the world’s biggest economy...

15 July 2024

How access to US market changed the fortunes of two South African sisters

Two entrepreneurs take traditional African designs and sustainable materials and turn them into international success What started as a pastime desire to sell crafts at local markets, deeply rooted in the South African culture, has since blossomed to become an international business entity for two local women.It took the Mokone sisters, Morongwe "Mo" (37) and Michelle (34), three years only to turn around their home decor business into an...

01 July 2024

South Africa walks a tightrope on US relations

South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...

28 March 2024

Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship

As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country.  I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...

13 March 2024

South African president Ramaphosa meets with US congressional delegation

South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...

21 February 2024

US congress receives Bill to review South Africa relations

A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...

09 February 2024

Fitch research unit expects better AGOA deal for South Africa

Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...

09 January 2024

South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities

Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...

20 November 2023

US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa

President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...

09 November 2023

US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility

Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...

07 November 2023

You are here: Home/News/Article/Poultry dispute threatens South African trade with US