US meat firms hope for South African trade boost
The final legislative approval, which comes just ahead of US president Barack Obama’s trip to Kenya and Ethiopia this month, means African exporters will continue to be able to export to the US duty free – at least until 30 September 2025.
But importantly for the US, the extension will lead to South Africa, sub-Saharan Africa’s second-largest economy (after Nigeria), easing a $0.80 per kilogram anti-dumping duty, imposed on chicken legs and thighs 15 years ago.
This followed an agreement between the US Poultry & Egg Export Council (USAPEEC) and the South African Poultry Association (SAPA) over the issue. “This duty is unjust, which I guess is a nice way of putting it,” said USAPEEC president Jim Sumner.
Duty exemption
He said the agreement – while not repealing the duties outright – would grant American chicken leg and thigh exporters a duty exemption of 65,000 tonnes for next year, a figure roughly equal to the export total when the duty was imposed.
“We would continue to get a percentage increase after that,” he said. “We would hope that it would grow conservatively to 80 million metric tonnes in a few years.”
According to the congressional compromise under which the AGOA extension was passed, president Obama has one month to set up a review of whether the poultry agreement is being kept.
“The bottom line is that there is a 30-day period in which the US government will see whether US poultry is entering South Africa,” said Sumner.
Pork producers
Pork producers, for their part, are more guarded when it comes to their prospects for improving their trade with South Africa.
“We were supportive of the renewal of AGOA, despite South Africa’s de-facto ban on US pork,” said Dave Warner, spokesman for the National Pork Producers Council.
Warner said officials from the US and South Africa met as recently as last week to discuss the three “disease issues South Africa is using to keep US pork out of the country”, while continuing to accept imports from key competitors such as Brazil, Canada and the European Union (EU).
'No scientific justification'
Although the South Africans are citing concerns about American outbreaks of porcine reproductive and respiratory syndrome (PRRS), pseudorabies (PRV) and trichinae as reasons to keep US pork out, Warner claimed: “There is no scientific justification for the ban.”
He added: “We’re making progress on this issue, but that’s separate and apart from AGOA.”
South Africa is AGOA’s largest beneficiary, with the US International Trade Commission reporting that the country exported $3.1 billion under its rules to the US in 2014. It will need to keep Washington happy to maintain these privileges.
Under the extension of the act, the US has more flexibility in dealing with countries not meeting eligibility requirements, enabling president Obama to give countries potentially in breach of AGOA rules 60-day warnings if their preferences are to be withdrawn.
