South Africa is to re-open its market to US poultry imports for the first time in 15 years after a deal between the countries' governments.
Under an agreement signed in Paris late last week, US bone-in chicken imports will be allowed into South Africa.
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In 2000, amid claims US processors were dumping cheap poultry products in South Africa, Pretoria put anti-dumping duties on the imports. US poultry companies claimed the move broke World Trade Organization rules and asked President George W. Bush and then President Obama to act – but to no avail.
A deal has been reached with the African Growth Opportunity Act (AGOA) – a US law passed in 2000 to give preferential market access to African countries including South Africa – set for renewal.
A total of 65,000 tonnes will be allowed in without being subject to the duties. However, US processors will face a "most favoured nation" duty of 37%.
South Africa's Department for Trade and Industry said the agreement would "secure the continued participation of South Africa in the reauthorised 2015 AGOA".
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By GlobalDataSouth Africa’s special envoy on AGOA, Ambassador Faizel Ismail, said: "This is a very important deal for South Africa that we are pleased to have been able to strike. The deal will not only enable South Africa to be fully included in AGOA, but more importantly, it means that numerous products such as the cars, base metals, chemicals, citrus, wines, macadamia nuts, amongst others will continue to enjoy the current preferences that they do under AGOA. They will also be able to invest and expand the enormous opportunities that are there in the US market."
The National Chicken Council, a body representing US poultry processors, welcomed the agreement.
"In our view, South Africa’s unfair and protectionist practices must be addressed before Congress would be justified in extending the AGOA program; it makes no sense for the United States to give special preferences to countries that treat our trade unfairly," a spokesperson told just-food.
"Which is why we are pleased with last Friday’s announcement that there was an agreement reached by the United States and South Africa to end South African tariffs on U.S. chicken imports, which paves the way for the reopening of the South African market to US chicken imports, which have been shut out for the past 15 years. The agreement is a win for free trade and welcome news for both South Africa and the United States. We look forward to working with our government and the South Africans on implementing this important agreement."
Shares in South Africa's listed poultry processors took a hit in the wake of the announcement. Astral Foods saw its shares fall more than 3% yesterday, with its stock down again by over 3% today.
In a statement issued yesterday, Astral CEO Chris Schutte, who was part of the delegation at the talks, said: "We are pleased with the outcome of these negotiations and believe that sanity prevailed where we
were able to protect the poultry industry from untenable levels of US bone-in-chicken imports."
