Agoa renewal: Local poultry industry loses out
Thousands of jobs and around R900m in revenue in the poultry industry have been put on the line so that South Africa can remain a beneficiary of America’s African Growth and Opportunity Act (Agoa).
The 15-year-old trade agreement allows 39 sub-Saharan countries to export – duty-free − more than 7 000 products to the world’s biggest economy. It’s non-reciprocal too, so the beneficiary countries are under no obligation to provide duty- or quota-free access to their own domestic markets for US goods.
South African exports account for 70% of Agoa’s (non-f uel) products. Agoa’s benefit to SA last year clocked in at $3.5bn (R43.5bn) in foreign exchange earnings. Indirectly through job creation and numerous downstream businesses, the agreement is worth billions more.
Industries such as citrus fruit, wine and, importantly, vehicle manufacturing are at least partially powered by the largesse of the US’s trade policy.
But from next year, at least 65 000 tons of US chicken pieces will be sold in local supermarkets. The bone-in brown meat pieces − primarily leg and thigh − are expected to undercut local prices and scythe the profits of producers.
Last month, JSE-listed Astral Foods, which bases its business primarily on chicken, warned the imports were likely to negatively impact local farmers. But having bargained the US down from its initial quota demand of 110 tons a year to 65 tons a year, the company said the deal, which was integral to the extension of the Agoa agreement, was acceptable.
Since 1999, SA has had in place an antidumping duty of R9.40/ kg on chicken coming in from the US. This is in addition to the 37% tax on all chicken imports, most of which come from the EU. America has demanded that this antidumping duty be pulled and that the country be allowed to compete on the same basis as other importers.