U.S. warns of fallout over South Africa chicken trade impasse - CNBC Africa

U.S. warns of fallout over South Africa chicken trade impasse

Southern Africa

by Reuters 0

The United States vowed on Monday to press ahead with a review that could cut South Africa's access to trade benefits. PHOTO: Wikipedia

The United States vowed on Monday to press ahead with a review that could cut South Africa's access to trade benefits after the country missed a key deadline for resuming U.S. poultry imports.

South Africa has banned U.S. poultry imports since last December after an outbreak of bird flu. The measure came on top of 15 years of punitive import duties on some U.S. chicken products.

The two countries had set an Oct. 15 deadline to agree on new animal health and food safety rules, which also affect U.S. beef and pork exports and are estimated to cost the United States more than $80 million a year.

But a spokesman for the U.S. Trade Representative said South Africa missed the deadline and Washington had no choice but to move on with a review of South Africa's eligibility for trade benefits under the African Growth and Opportunity Act (AGOA).

Eliminating barriers to U.S. trade and investment is one of the criteria for membership of AGOA, which provides duty-free access to goods from sub-Saharan African countries, ranging from crude oil to clothing.

"We have to complete a review of South Africa’s compliance and, if it is not meeting the eligibility requirements under AGOA, we must take action," spokesman Trevor Kincaid said in an emailed statement.

"Accordingly, and taking into account the commitments that remain outstanding, we are proceeding to complete the review and determine the appropriate action in light of the results.”

Cutting access to AGOA could see South Africa lose as much as $1.7 billion of exports a year. There is no set deadline to complete the review.

Senators from the chicken-producing states of Delaware and Georgia said they were disappointed South Africa had failed to follow through on opening its markets after agreeing in June to drop anti-dumping duties on bone-in chicken.

"South Africa must take the necessary steps to resolve outstanding barriers to U.S. poultry immediately if its AGOA benefits are to be preserved," Democrats Tom Carper and Chris Coons and Republican Johnny Isakson said in a joint statement.

National Chicken Council president Mike Brown urged the administration to take the necessary action to get U.S. chicken back in South African markets as soon as possible.

Many had expected the United States to become one of South Africa's top poultry suppliers after the June agreement, hitting the shares of South African producers such as Astral Foods and Quantum Foods Holdings.

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