SOUTH AFRICA – South African farmers have called for higher tariffs on ‘cheap’ chicken imports from the United States, which are said to be becoming a threat to the poultry industry in the country, reports Fin24.
SA poultry farmers said that the tariffs on the metal industry were a breach of the African Growth and Opportunity Act (AGOA) requirements, which came into effect in May 2000, providing trade preferences for quotas and duty-free entry to the US for certain goods.
“I’d like the South African government to introduce higher import tariffs, we can’t compete with subsidised chickens from overseas,” said Herman Pretorius, a chicken farmer.
“I wanted to expand my business, create jobs for our people but the imports from overseas had really hurt us.”
Long poultry tussle rekindles
The South Africa Poultry Association has moved to file a lawsuit calling for the suspension of the US poultry tariff exclusion.
While US has kept South African poultry out on health and sanitation grounds, South Africa has accused the former of dumping chicken at below-cost prices, thus call for tariffs.
US and South Africa have had a long battle on the market access issues in South Africa for US frozen chicken imports specifically the anti-dumping duties that were in place until 2015.
South Africa had put in place anti-dumping duties on bone-in frozen chicken imports from also Brazil, Germany, Netherlands and the United Kingdom
To solve the chicken battle, an agreement was reached on the removal of a valid trade remedy measure applied in South Africa in exchange for the retention of duty free access to the US market for certain South African export products.
The South African Poultry Association (SAPA) had offered a rebate on 50% of the annual tonnage but this was rejected as insufficient by the US Poultry and Egg Export Council (USPEEC).
SAPA then resolved to maintain the anti-dumping duties, a measure to protect the domestic industry against harm caused by the unfair trade practice of dumping.
In order to gain duty free access to the US market for export products, including citrus fruits, wine and motor vehicles, US poultry tariff exclusion was implemented in 2015.
South Africa’s poultry industry agreed to exclude 65,000 tonnes of U.S. chicken from the anti-dumping tariff for duty-free access into the US.
Void chicken deal
The move deals a blow to the US, one of the world’s largest producers of chicken meat following Trump’s decision to impose tariffs on steel and aluminium from South Africa and according to farmers, such imports have brought a standstill in an industry that has the potential to grow.
The poultry farmers argue that since US aluminium tariffs apply to South Africa contrary to AGOA agreement, the 2015 chicken deal no longer holds.
U.S. producers on the other hand said the South African tariff was illegal.
“The anti-dumping duties imposed on U.S. poultry were based on a flawed legal theory, that has twice been held by WTO (World Trade Organization) panels to be inconsistent with international rules,” said James Sumner, president of the USA Poultry & Egg Export Council (USAPEEC).