South Africa, US Announce Deal to Resolve Poultry Trade Fight

11 June 2015

US and South African officials announced a deal last week that will pave the way for the re-entry of US chicken imports to the South African market, thus ending the longstanding poultry dispute between the two countries. The details of the agreement should be fine-tuned by the end of the month.

“South Africa will end punitive duties on US chicken and renew imports, initially 65,000 tonnes a year, under an agreement reached by the two countries,” announced South African Trade and Industry Minister Rob Davies following the discussions, in comments reported by the Economic Times.

The news was confirmed after representatives from South Africa and the US met in Paris, France on the margins of the Organisation for Co-operation and Development (OECD) Ministerial Council Meeting, which took place on 4-5 June.

A further set of actions will be undertaken later this month to resolve the remaining sanitary issues related to poultry, pork, and beef, media reports indicated.

“We are pleased that significant progress was made between the US and South African chicken industries that will allow US chicken products access to South Africa after being blocked from that market for the past 15 years,” said US senators Johnny Isakson and Chris Coons, who confirmed that American poultry is likely to enter the South African market by year’s end.

Isakson is a Republican from Georgia while Coons is a Democrat from Delaware, both major poultry-producing US states. The two senators had previously pressured the Obama Administration to block the renewal of South Africa’s participation in the African Growth and Opportunity Act (AGOA) unless market access for American poultry exports was increased.

“We look forward to working with our government and the South Africans on implementing this important agreement,” the USA Poultry & Egg Export Council and the National Chicken Council said in a statement.

It was a deal “within the tolerance of the [South African poultry] industry and is something we can all live with,” said Davies.

Since 2000, imports of certain US chicken products into South Africa have been subject to anti-dumping duties of above 100 percent, which US poultry meat exporters have deemed unfair. Industry groups say that the removal of these import barriers will provide market access that had previously been denied for the last 15 years.

Earlier this year both countries’ poultry associations resumed talks aimed at reaching a solution, including some additional market access for US poultry products as well as increased investment, training, skills development, and support for intra-African trade. (See Bridges Weekly, 29 January 2015)

Good news for AGOA renewal

According to observers, this agreement should help smooth the passage of the African Growth and Opportunity Act, currently before US lawmakers. While already approved in the Senate, the preferences bill must still secure approval of the House of Representatives, along with sign-off by the President. (See Bridges Weekly, 21 May 2015)

AGOA is the non-reciprocal trade preference scheme that provides certain African products with preferential quota and duty-free access to the US market. It builds upon the US Generalised System of Preferences (GSP), a set of formal exceptions from the WTO’s most-favoured nation (MFN) principle, which allows developed countries to offer developing countries preferential treatment on specific goods.

South Africa’s AGOA eligibility

“The framework agreed by the two industries facilitates South Africa's continued participation in AGOA and is a commendable effort by the poultry industry in the interest of the South African economy,” said Davies.

Although US poultry meat exporters have been negotiating lower tariffs on their products over the past several years, more recently they have urged Washington policymakers to condition the continued access of South Africa to AGOA upon their compliance. (See earlier Bridges Weekly, 29 January 2015)

With AGOA set to be renewed for another ten years, given that the current version is due to expire on 30 September, the future of South Africa in the scheme remained uncertain. Following doubts regarding South Africa’s compliance with certain provisions of the bill, the country was due for an out-of-cycle review at which time it would be determined whether its eligibility will be withdrawn, suspended, or limited.

Whether this provision will remain in the final AGOA bill has not yet been formally confirmed, given that US legislative efforts are still ongoing, though may now be less likely in light of these new developments. (See Bridges Weekly, 30 April 2015)

Improved trade ties

Officials from both sides have welcomed the move as a valuable step toward strengthening their existing trade ties.

“The United States and South Africa can work together to address trade issues, demonstrating that US trade tools can effectively deliver results for the United States,” said US Ambassador to South Africa Patrick Gaspard. “I am happy with the progress towards a mutually agreed solution that we made, and look forward to our working together to resolve bilateral trade problems.”

"I think by solving this matter we've put the relationship back on a more cordial and productive footing," Davies similarly reaffirmed. 

ICTSD reporting; “Agreement reached in US-South Africa poultry dispute,” WORLD POULTRY, 8 June 2015; “South Africa, U.S Resolve Chicken Import Issues,” ALLAFRICA, 8 June 2015; “South Africa opens doors to U.S. chicken imports,” REUTERS, 6 June 2015; “US to export 65,000 tonnes a year of poultry to South Africa,” THE ECONOMIC TIMES, 6 June 2015.

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