THE DEBATE around the African Growth and Opportunity Act (Agoa), prescribing regulations and duties for meat imports and exports is no hollow hullabaloo. South African rules on US imports are jeopardising benefits that are vital to the industry, as well as our economy.
Agoa has partially facilitated duty-free access for more than 90 percent of South Africa’s exports to the US and has created 62 000 jobs in our country.
In the absence of a free trade agreement, Agoa provides the beneficiary countries in Sub-Saharan Africa with liberal access to the US market. This opportunity strengthens African reform efforts and provides improved access to US credit and technical expertise.
Through the US-Sub-Saharan Africa Trade and Economic Forum, it also creates a high-level dialogue on trade and investment. South Africa’s 15-year antidumping measures on US poultry are the Sword of Damocles hanging over these much-needed Agoa benefits, whose renewal is due in September.
Senator Chris Coons from Delaware has vowed to “block” the renewal of the act, if South Africa persists with the antidumping measures on US poultry imports. Coons is a major player, who supports Agoa, and hopes to negotiate a fair path forward as Congress considers its reauthorisation later this year. “But South Africa cannot expect to continue to reap the benefits of increased trade, without playing by the rules. I will do everything in my power to ensure they do not continue to benefit from Agoa. The choice is theirs.”
Increased imports hold significant benefits for the poultry industry and for the South African economy. These benefits should not be denied or underplayed.
Imports keep the South African industry honest and competitive and are not to blame for any woes in the local industry: brining constitutes up to 40 percent of what masquerades as local frozen chicken, and is bought by unsuspecting South Africans.
Furthermore, the salt water and flavourants it contains pose major health risks. Despite these problems, the local poultry industry is valued at a whopping R29.8 billion. It should be noted that imported chicken is not brined and is therefore, arguably, of superior quality.
Create jobs
Poultry imports need to be appreciated for their significant contribution in putting bread on the tables of South Africans. Imports come in through harbours, and need to be checked, stored, packaged, refrigerated, frozen, transported, sold and prepared. All these actions need people and create jobs in a market with an increasing demand for affordable protein.
Then there is the role of the fiscus in the form of customs duties,VAT, and corporate and personal taxes. Imported poultry is worth an absolute fortune to the national income account.
Industry experts were relieved when the Department of Agriculture, Forestry and Fisheries announced that it intended to cap the brining of individually quick frozen chicken portions at 15 percent and that of whole birds at 10 percent.
The implementation date was set at September 1, 2014 but is still eagerly awaited. One needs to ask why this promise to protect the consumer has thus far been ignored.
Your article, “ SA team in bid to salvage Agoa deal” (March 4, 2015), quotes Minister Rob Davies as being “optimistic South Africa would retain its participation in Agoa”. These are welcome sentiments but South Africa will have to honour the rules that go with the benefits. Is South Africa biting the hand that feeds it, by failing to realise its threatened exclusion from Agoa benefits later this year?
The South African economy will suffer grave damage without Agoa benefits. As a committed industry role player, the Association of Meat Importers and Exporters of South Africa acknowledges the government’s efforts to find an amicable resolution. What we need now, though, is resolute action.
David Wolpert is chief executive of the Association of Meat Importers and Exporters of South Africa.