Africa's agriculture and value addition magazine

US and SA ‘close to resolving meat dispute’

Posted in Dairy & Livestock

SOUTH AFRICA - The Obama administration is not "bullying" SA by threatening to suspend duty-free treatment of its farm products unless a 15-year-old dispute over chicken wings and legs was resolved by January 4, Laird Treiber, economic counsellor at the US embassy in Pretoria, said on Tuesday.

In a teleconference, Mr Treiber sounded confident that the dispute over access to the South African market for US poultry, beef and pork would be resolved ahead of the deadline and that the first shipment of US chicken parts would arrive in SA by the end of the year.

"We are tantalisingly close," the diplomat said, echoing Trade and Industry Minister Rob Davies.

He said work was being completed on the health certificates required for trade to resume.

Asked whether he agreed with critics who claimed the South African government had "bungled" in letting the dispute reach this stage, Mr Treiber said "we would not share the characterisation of SA as anything but good partners".

He said he regretted that the US ultimatum might well cause loss of orders for South African exporters even if the deadline were met because of the uncertainly created.

Last Thursday, Mr Obama notified the US Congress he was giving SA 60 days to comply with the eligibility requirements of the African Growth and Opportunity Act (AGOA) by reopening its market to the meats. US frozen chicken portions have been shut out of SA by antidumping duties since 2000.

Although a formula was agreed on in June to lift those duties from an annual quota of the specific product line, all US poultry continued to be barred from SA, with beef and certain cuts of pork, on food safety and animal health grounds.

The foreign agricultural service of the US government estimates that the annual value of the exports that would result from the lifting of SA’s phytosanitary bans on the meats would be $60m for poultry, $30m for beef and $15m for pork.

Brazil is SA’s dominant foreign source of poultry meat with 43% of imports. The Netherlands has a 19% share, the UK 11% and Germany 6%. All three, as European Union members, enjoy duty-free access and are cutting into Brazil’s share.

The US threat to withdraw nonreciprocal trade privileges from South African farm products drew an angry response from the African National Congress.

Mr Treiber countered that the US under Agoa was giving eligible countries "duty-free access for 6,000 goods to the biggest single market for almost every one of those goods, and have been doing so for 15 years".

He said the US was happy to see South African companies taking advantage of Agoa even when it was giving them an edge against US competitors.

"That is the whole point. We believe in the open market. We believe in its power to transform, spark job growth and prosperity. What we have asked for in return is that SA … basically fulfil the requirements of Agoa that have been present since (the act was passed) in 2000 that a country not block our exports."

He also emphasised that the US was only threatening a small portion of SA’s exports under Agoa.

SA could lose Agoa and other benefits if President Jacob Zuma signs the Private Security Industry Regulation Amendments Act in its current form.

The local ownership clause could force foreign companies to sell assets at less than fair market prices, which many see as tantamount to expropriation.

November 11, 2015;