United States trade negotiators are demanding the lifting of general tariffs on imports of American chicken into South Africa. The problem for South African negotiators is that the duties apply to multiple countries, not only the US.
Concede to the US, and other countries will demand the same, hugely increasing the threat to the South African poultry industry.
And there’s another issue: tariffs are imposed after an investigation by South Africa’s trade regulator, the International Trade Administration Commission (ITAC) and a recommendation to the trade and industry department. This is what happened when the general tariffs (known as most favoured nation or MFN tariffs) on chicken imports were increased in 2013 and again in 2020 because imports were harming the local poultry industry.
Would removing them require another investigation, which could well find that they are justified and should remain, or even be increased?
MFN tariffs apply to all nations, except the European Union, the United Kingdon and South Africa’s neighbours in the SADC bloc, all of which have duty-free trade agreements with South Africa. That’s duty-free in both directions, which is not what the US is offering – they want to keep their tariffs while removing those charged by South Africa.
America resents EU poultry producers getting duty-free access to South Africa when US producers are denied it. The US is demanding the removal of all tariffs – both general tariffs and the anti-dumping duties that have applied since 2020 because the US was sending chicken portions to South Africa at dumped prices that harmed the industry and cost local jobs.
The general tariffs to which the US objects include 62% on bone-in imports such as leg quarters, 42% on boneless cuts and 30% on offal products such as chicken heads, feet and livers.
If South Africa accedes to the US demands, what does it say to Brazil – the major source of South Africa’s chicken imports – as well as Argentina, Thailand and Australia should they insist on similar concessions? “Sorry, not for you?”
Or does the fact that America wields such a big stick entitle South Africa to plead force majeure for circumstances beyond its control?
