US threatens South Africa with trade suspension
In June, the African Growth and Opportunity Act (AGOA) was renewed, which allows African countries to export to the US duty-free. The scheme will continue until October 2025 under its current agreement.
As part of the renewal, the US had negotiated an end to ‘anti-dumping’ duties imposed 15 years ago, which prevented it from selling bone-in chicken below cost, which some South African bodies said undermined domestic poultry businesses. Access for beef and pork was also to be improved.
However, this is yet to happen, and Michael Froman, US trade representative has now added his voice to the debate. “A resolution to unfair barriers on US exports is urgently needed,” his spokesman told The Financial Times on September 11. “Without swift action, South Africa risks losing important tariff benefits under AGOA.”
'Market barriers'
Senator Chris Coons from the poultry producing state of Delaware added: “US poultry representatives negotiated a deal in good faith, and while I remain hopeful a deal will be implemented, I am concerned we are not seeing enough progress and market barriers persist.”
On 8 June, when the renewal was announced, US senator Tom Carper, also from Delaware, said he expected US chicken to be available in South Africa before the end of 2015. He said the deal would end the “unfair trade practices [that] have kept our chicken farmers out of that market to this point”.
However, as GlobalMeatNews reported on 20 August, South Africa has so far circumvented the agreement by imposing across the board import health restrictions based on avian influenza, rather than a regionalised ban recommended by the OIE. The country had agreed to take 65,000 tonnes of bone-in chicken per year.
Jim Sumner, president of the US Poultry and Egg Export Council said: “We hope that’s going to change but we haven’t seen any evidence of it. If South Africa continues along that line, my understanding is it could be a costly decision.”
