Is the South African poultry industry once again going to be sacrificed in a trade deal with the United States? The omens are not good, and poultry producers are beginning to fear the worst.
At issue is an annual 72 000-tonne quota of US chicken allowed into South Africa free of the anti-dumping duties which should apply. The US insisted on that quota as a condition of the 2015 agreement to continue to allow other South African industries duty-free access to the US market.
That was during the negotiations to renew South Africa’s benefits under the African Growth and Opportunity Act (AGOA) for 10 years from 2016. For the sake of South African steel, cars, wine, fruits and other products, the poultry industry agreed to “take one for the team” as a producer put it.
The result was a flood of dumped US chicken portions into South Africa, not subject to any sanction. From a mere 330 tonnes in 2015, imports of American chicken rose to 69 000 tonnes in 2017 and 82 000 tonnes in 2019. Volumes have since declined as bird flu swept through the US, but they will recover if the US gets the disease under control.
There are two twists to this tale. The first is that the AGOA contract specifies that, should other South African industries lose their AGOA benefits, then the chicken quota falls away. As President Trump’s wave of tariffs have done exactly that, the South African poultry industry has asked the government to formally nullify the quota. They have had no reply.
The second is that South Africa is trying to negotiate a new trade deal with the US to prevent tariffs on all industries rising to the threatened level of 30%. US negotiators are demanding concessions, including increased access to South Africa for American pork and poultry.
In effect, the US wants a trade deal to dump chicken in South Africa, regardless of anti-dumping duties or AGOA conditions, and irrespective of whether the AGOA deal with African countries is renewed in September or scrapped entirely.
Anti-dumping duties have been in force against US chicken imports since 2000, because the South African trade regulator ITAC has repeatedly determined under WTO rules that they are coming in at unfairly low prices, harming the local poultry industry and threatening South African jobs.
After its latest investigation, ITAC concluded that those anti-dumping duties remain justified, and has renewed them for a further five years.
A new US quota, as part of a Trump trade deal, would effectively evade continuing anti-dumping duties. Once again, the poultry industry would suffer, in order that other industries might benefit.
