Trade and Industry Minister Dr Rob Davies
Photo by: Duane Daws
Trade and Industry Minister Dr Rob Davies expressed optimism on Friday that the South African and American poultry industries would find a “sweet spot” settlement at meetings early next week that should address anxieties of those US Senators warning that the impasse could threaten their support for South Africa’s continued status as a beneficiary of the African Growth and Opportunity Act (Agoa).
The unilateral trade arrangement offers duty- and quota-free access on some 6 000 tariff lines to eligible African countries and is viewed as particularly important for the export competitiveness of South African automobiles, citrus, wine and clothing and textiles.
There is also consensus in both Pretoria and Washington that Agoa has been beneficial to the bilateral trade relationship, which has generally expanded since Agoa’s inception in 2000. In 2014, South African exports to the US amounted to R69-billion, while American exports to South Africa stood at R71-billion.
But Agoa is due to expire on September 30, 2015, and the US Congress will, in the coming months, be considering its reauthorisation as part of a larger package of trade authorisations. African beneficiary countries are urging the lawmakers to extend the arrangement for a further 15 years.
However, 13 US Senators recently wrote to Davies expressing their concern at the lack of progress in negotiations over the antidumping duties on US chicken, which they said had been blocking the export of American chicken to South Africa for 15 years.
The Senators warned that should there be no resolution before the legislative process to reauthorise Agoa, they would “consider strengthening Agoa to prevent South Africa from benefiting from duty preferences while continuing to discriminate against US goods, specifically poultry”.
Speaking ahead of his departure for trade talks in Washington next week, Davies reported that the South African Poultry Association (Sapa) would be making a substantially improved offer to the USA Poultry and Egg Export Council (USAPEEC) at meetings on April 13 and 14. He expressed optimism that a “win-win” resolution could be found, but said that the South African government had indicated to Sapa that resolution was becoming increasingly urgent in light of the US legislative timetable.
A South African delegation of government, business and labour representatives hoped to be in a position to report “substantial progress” during the upcoming Trade and Investment Framework Agreement council meeting with the US Trade Representative, which would have a major focus on outstanding Agoa matters, including the chicken issue.
South Africa and the US, Davies revealed, had “agreed to disagree” over the legality of South Africa’s antidumping duties on American chicken. However, the South African government had nevertheless urged Sapa to make an offer that balanced its sustainability concerns with improved market access for US chicken products.
The offer would be made in the form of a quota that would enable a certain volume of chicken imports to enter the South African market unemcumbered by the antidumping duty. Davies said he could not disclose the size of the quota, which remained the subject of confidential discussion between Sapa and USAPEEC. However, he committed government to ensuring that there was regulatory support for any deal made between the parties.
Besides a 37% import duty for all bone-in-chicken imports into South Africa, US chicken was currently subject to an additional R9.80/kg antidumping duty, which the US government argued made American chicken twice as expensive as other foreign imported chicken.
Davies was convinced that the quota offer could help avert a “lose-lose” situation where South Africa was excluded from Agoa, while the US poultry industry gained no new market access into South Africa.
“What we are looking for is an outcome . . . [whereby] we will concede some market space to US products – they will get market access into the South African market. It’s to find a sweet spot where we can accommodate that without creating mayhem in the South African poultry industry and at the same time accommodate their needs,” Davies said.