Agoa chicken war reaches impasse

The local poultry producers’ battle with their US counterparts authorities – where a cut in SA antidumping duties on poultry imports is being bargained against SA possibly being excluded from the African Growth and Opportunity Act (Agoa) – has reached an impasse. The stumbling block is that the SA Poultry Association (Sapa), its US counterparts, the USA Poultry and Egg Export Council (Usapeec) and the National Chicken Council (NCC) of the US, have so far failed to agree on a mutually acceptable volume of imported US chicken that could enter SA free of antidumping duties. And this has happened at a critical time. The two sides have to reach an accord ahead of the renewal of Agoa – and the US congress is due to pass the new act before the current one expires on September 30. The loudest US voices at the moment are the two US senators, John Isakson and Chris Coons, who are adamant that SA being included in the new Agoa depends upon this country allowing in more US chicken exports. And the duo has a distinct vested interest in the issue, both representing chickenproducing states. The problem as they see it is that imports are now subject to antidumping duties. But they want Pretoria to lift import duties on the cheaper cuts of chicken to which it is applied. Under US market demand, the chicken breasts (known as white meat) are sold at a premium price. But the bonein portions (brown meat) are not in big demand, and this being a surplus product allows the US to sell it at cut prices. To level out the playing field SA has, since 2000, had anti-dumping tariffs of above 100% on certain products derived from the chicken carcass. The senators argue that SA needs to make concessions if it wants to benefit from the duty-free access into the US market. Agoa provides for an extensive list of goods from sub-Saharan African countries. But Sapa CEO Kevin Lovell – who is currently overseas on a visit that will include discussions about the duty with US producers’ representatives – said before he departed that the parties were still far apart. This is revealed by the fact that, under the US proposal, the local poultry industry would shrink by about R2.1 billion if it gave way to imported US chicken. But under that of SA this shrinkage would be limited to R800 million. “We have proposed a volume-based quota that would be free of the anti-dumping duty,” said Lovell. “This quota is in line with what the Americans used to export to us plus market growth since then. “The Americans are asking for about three times that amount, for the antidumping duty itself to be removed and for normal tariffs (the so-called mostfavoured- nation tariffs) to be suspended for their quota number.” But Lovell described this US proposal as “both unreasonable and unacceptable”. “It is not about numbers,” he added. “It is about understanding what is reasonable and the numbers will follow from that.” Also visiting the US at this time are trade and industry minister, Dr Rob Davies, and officials from his department. And it is expected that on the sidelines of talks on the trade and investment framework agreement between SA and the US, they will also raise Agoa issues with US officials. But these SA government representatives are playing the chicken imports:v:Agoa issue relatively low key. Both the US and SA governments have left it to their poultry industry associations to come up with a mutually acceptable agreement. But not everybody in this country is in favour of the local poultry industry holding the economically beneficial Agoa agreement with the US hostage. David Wolpert, CEO of the Association of Meat Importers and Exporters (Amie), told FTW that there was no point in Sapa saying that the US producers should have gone to the World Trade Organisation (WTO) to oppose the antidumping duties at their inception. “You can’t go back to the past,” he said, “but rather you have to deal with the issue as it is at present.” And, on the Agoa issue, Wolpert was equally adamant. “As SA faces potential exclusion from Agoa renewal,” he said, “it is nothing more than manipulative obfuscation to debate whether or not the US poultry industry should or should not have taken measures in the past 15 years to protect their legitimate export interests.” INSERT & CAPTION We have proposed a volume-based quota that would be free of the antidumping duty but the Americans are asking for about three times that amount. – Kevin Lovell INSERT R2.1bn The amount the local poultry industry would shrink under the US proposal.