Pretoria - The poultry deal struck between South Africa and the US will enable South Africa to be fully included in the benefits of the African Growth Opportunities Act (AGOA), the Department of Trade and Industry (dti) has said.
This comes as the current AGOA which is due to expire at the end of September will see 65 000 tonnes of US chicken imported into South Africa. The two countries had been at loggerheads over the inclusion of US chicken imports into the South African market.
Briefing reporters on Monday, South Africa’s special envoy on AGOA -- which is a preferential agreement that has been in place since 2000 between the US and Sub Saharan African countries -- Ambassador Faizel Ismail said negotiations on the matter have been important.
Ambassador Ismail said that what had been of concern to South Africa was the demand by the US poultry industry represented by National Chicken Council and United States of America Poultry and Egg Export Council (USAPEEC) for the current anti-dumping duties that South Africa has in place to be dropped from the tariff book so that the US can resume their exports of poultry into South Africa.
As a result of the dispute, dti Minister Rob Davies urged the South African Poultry Association (SAPA) to begin a dialogue with USAPEEC over the last couple of months resulting in the deal being struck.
“When we arrived in Paris [France] on Thursday the gap was still significant. SAPA had an offer to allow 50 000 tonnes of bone-in chicken into South Africa and USAPEEC was still demanding 110 000 tonnes,” explained the ambassador.
Following further talks, a compromise was reached where the US will provide 65 000 tonnes of chicken.
“For South Africa that was very significant, it required a lot of talking, a lot of explaining to the US that the impact of any significant additional imports of bone-in chicken would be quite severe on both production and jobs. [This] in an industry that we want to grow and where we want to build the capacity of small farmers which is a very important part of the development strategy of government,” he said.
“There is another element to the offer which will include a growth factor which will allow for a percentage increase or decrease of any growth or decrease in production or consumption that takes place on annual basis. We’ve also agreed to manage any volatility in the market by spreading the imports over the course of the year.”
There is also an outstanding matter of animal health that the Department of Agriculture, Forestry and Fisheries (DAFF) is managing and this has to do with the existing ban on poultry from the US to South Africa due to the existence of avian flu, however with the deal in place the chicken will be sourced from states that are not afflicted by bird flu. That negotiation will be finalised before the end of June.
Of concern to the US was the issue of beef and pork where South Africa has agreed to recommend to Cabinet to unban the existing ban of beef products from the US because of disease. Similarly pork had also been banned.
“Most important thing for South Africa is that the poultry deal we’ve just struck will enable South Africa to be fully included in the benefits of AGOA over the next 10 years. This means that for numerous industries in South Africa including the auto, chemical sectors and a number of agricultural products that we export to the US, these sectors will continue to enjoy current preferences that they do. They will be able to invest and expand the enormous opportunities that are there in the US market. This is an important deal, we are pleased,” said the ambassador.
Currently the US Congress is discussing the extension of AGOA. So far the Senate has agreed to extend AGOA for 10 years and it has also agreed to include South Africa.
Chief Executive of SAPA Kevin Lovell said that the parties already have a draft agreement that needs some fine tuning that requires signatures by both parties among other things. Following that it will go through a public participation process which will be run by the International Trade Administration Commission (ITAC).
“We would estimate that this concession will come into force somewhere between four and six months from now. That gives us as an industry that same amount of time to deal with the mitigating effects of what we think will happen to us as a result of this concession. If we don’t mitigate the effects we will lose about R900 million worth of turnover and at worst could lose about 6 500 jobs,” said Lovell.
SAPA said Lovell is working with the dti and DAFF to make the impact on the industry as small as possible.
“It’s going to take a lot of continuous work between the industry and government in general to make this to be a truly successful outcome for South Africa,” said Lovell.
Some of the industries that have benefitted from AGOA include the automotive, chemical, citrus and wine industries. - SAnews.gov.za
