SA’s Agoa inclusion under threat

SA’s anti-dumping duties on US poultry could threaten its inclusion in the African Growth and Opportunity Act (Agoa) – up for extension in 2015. Industry insiders confirm that the United States poultry sector’s opposition to these duties could be seen as a threat. But some say the timing of the initiative is “all about bluster”. Last week, US National Chicken Council representative, Bill Roenigk, said that unless the country lifted the imposition of “irrational and inconsistent” anti-dumping duties, several members of the US poultry industry would “strongly oppose” any further extension of Agoa preferences to South Africa. Carol O’ Brien, executive director of the American Chamber of Business South Africa (AmCham), believes that this initiative could strengthen the case of those opposed to Agoa being renewed for South Africa. “We are aware that there is opposition as South Africa is not seen to be a developing country by the US and Agoa was ostensibly designed to assist developing countries to grow their markets,” she said. AmCham has been vocal in its support of South Africa’s inclusion and has actively engaged US Congress on this matter. O’Brien said that AmCham was working with South African minister of trade and industry, Dr Rob Davies, to find a win-win solution that will address the business issues that American businesses in South Africa face. A meeting is scheduled for Monday, January 27. The South African Poultry Association (Sapa) also conceded that since the inclusion is a unilateral decision, the move by the US poultry industry is a risk. But the key question, said Sapa CEO Kevin Lovell, is: “If they really feel that the anti-dumping duties are irrational and inconsistent, why have they not taken this issue to the World Trade Organisation (WTO)?” He told FTW that in his opinion Roenigk’s statement was “all bluster”. “Sapa hopes that the US Congress is able to see through the smoke and mirrors and questions the credibility of this claim,” Lovell said. The anti-dumping duties, first imposed in 2000, have been under review twice since then. “Therefore, the US poultry industry has had three opportunities to raise their concerns, and to date they have not done so,” he said, adding that it was a pity the industry chose, instead, to action its concerns in a media battle on an issue that lacks validity. According to Lovell, the anti-dumping duties were imposed because the low price of the chicken pieces – largely quarter legs which are perceived as “waste” by the US poultry market – is not related to the cost of production. “It’s an artificial pricing method which is contrary to WTO fair trade practices,” he said. Other industry bodies feel differently. “The main reason the dumping cases have been lost is because of the way cost build-ups have been calculated – a method that has recently been ruled as unacceptable by the WTO,” said David Wolpert, chief executive of the Association of Meat Importers and Exporters of SA (Amiesa). He added that it was therefore likely that the US had a solid case for the next review. He says poultry imports represent less than 10% of local poultry consumption, a percentage that is “far too low to have any meaningful negative impact” on local industry. The USA Poultry & Egg Export Council (USAPEEC) concurred, telling FTW that it had been proven that poultry exports from the US did not compete directly with domestic products. “From recent news reports it is obvious that chicken produced in South Africa has become too expensive for many South Africans to afford. To us, it’s unconscionable for the South African industry to continue down the path of protectionism at the expense of its own citizens,” said USAPEEC president, Jim Sumner. INSERT & CAPTION AmCham has been vocal in its support of South Africa’s inclusion and has actively engaged US Congress on this matter. – Carol O'Brien