US imports ‘could affect poultry jobs’

THE agreement reached between the US and SA allowing for the import of thousands of chickens from the US could result in job losses in the local poultry industry, Trade and Industry Minister Rob Davies says.

“The imports will have an impact on domestic production and jobs but within the range of tolerability for the industry,” Mr Davies told Business Day yesterday.

The job losses would be offset to some extent by those to be created when companies, mostly black economic empowerment firms, are awarded contracts to process and package the imported chicken, the minister said. If the job losses materialised, it would be disastrous for an economy with 5.5-million unemployed people.

The agreement, which will see SA import 65,000 tonnes of chicken a year from the US duty-free appears to be a compromise to facilitate SA’s participation in the renewed African Growth and Opportunity Act (Agoa). There has been stiff opposition from some US congressmen to SA’s inclusion in the renewed version of Agoa, saying the local economy was too advanced and benefiting unfairly from the plan, to the disadvantage of other African countries. Agoa allows for the duty-free export of goods from sub-Saharan countries to the US.

The deal was struck at the weekend by US and South African officials and poultry industry players from both countries.

Good news was also reported on Friday night when Fitch Ratings affirmed SA’s sovereign credit rating at BBB with a negative outlook. Fitch warned that weak economic growth, failure to reduce the budget deficit and stabilise government debt, and failure to materially narrow the current account deficit, could lead to a future downgrade. Economic growth was revised slightly to 2.1% this year and 2.3% next due to an unstable power supply. Growth was then seen picking up to 3% in 2017 as energy constraints started to ease. Resolving the energy challenge was a priority, the Treasury said in response to the Fitch review.

Forthcoming wage negotiations in the gold and coal sectors could lead to further debilitating strikes or a sharp increase in wage costs, Fitch warned. Policy proposals under discussion such as parts of the mineral resources law, visa regulations, a minimum wage and amendments to the labour law and land reform, could have an adverse effect on growth, Fitch cautioned.

The imports will have an impact on domestic production and jobs