The statement by the US poultry bosses revealed that their primary target is not the 72 000 tonne quota, which they seem to regard as a victory already won, but the other tariffs that apply to imports of US chicken into South Africa.
US trade officials are irked by the fact that chicken imports from the European Union come into South Africa duty-free, but US imports are subject to Most Favoured Nation (MFN) general tariffs. They want the general tariffs on US chicken to be scrapped, or reduced.
This ignores the fact that in terms of South Africa’s economic partnership agreement (EPA) with the EU, trade is duty-free in both directions. What the Americans want is duty-free for them, and tariffs – possibly high tariffs – for us.
The primary general tariff the Americans have in their sights is the 62% charged on imports of bone-in portions such as leg quarters. They will also be looking at the general tariffs on whole frozen chicken (82%), boneless portions (42%) and offal (30%).
The US poultry statement complained that the 62% tariff on bone in portions had been raised from 37% in 2020. Whether they are pushing for complete abolition or only a reduction back to 37% remains to be seen.
Offal is probably also high on their list, as it is the second-highest category of South African chicken imports. The largest category is mechanically deboned meat, or MDM, which comes in duty-free. Offal imports, mainly from Brazil, have been rising rapidly, and removal of the 30% tariff on chicken heads, feet and livers would help the US compete in the South African market.
It seems that US negotiators are hoping for an eventual 120 000 tonnes of chicken exported to South Africa free of any duties. They might regard that as a trade triumph, but it would hammer South Africa’s chicken farmers, force closures and job losses, and heighten misery and poverty in South African rural areas.
