Trade and Industry Minister Dr Rob Davies says South Africa’s concession to improve market access for US bone-in chicken cuts would “consolidate” the country’s participation under the reauthorised African Growth and Opportunity Act (Agoa), which was due to be extended for ten more years from October 2015.

The poultry agreement, which was reached in Paris, France, did not upend South Africa’s 15-year antidumping duties on American chicken imports, but instead set a 65 000 t/y quota for bone-in chicken cuts arising from the US. The quota could be increased based on changes to consumption and production conditions in the South African market.

Davies told Engineering News Online in a telephonic interview from Egypt that the “accommodation” had been made following simulations of what the domestic industry, represented at the talks by the South African Poultry Association, could “tolerate”. The National Chicken Council and United States of America Poultry and Egg Export Council meanwhile represented the US industry at the talks.

The modelling exercise showed that the concession would not only displace poultry imports from other countries, but would also have a negative impact on the domestic industry. “But it’s a manageable impact,” Davies argued, adding that the effect would be mitigated through poultry value-chain support measures being introduce through the Agricultural Policy Action Plan.

“We think that, on balance, this is a reasonable outcome from the point of view of the economy as a whole,” Davies said, noting that Agoa remained important for not only the automotive sector, but also for a range of agroprocessing sectors, including macadamia nuts, wine and citrus.

“The overall trade relationship with the US is one which has been growing over time  . . . and does include a proportion of value-added products, many of which are catered for under the Agoa arrangement. So Agoa continues to be of value to us,” Davies said.

The value of Agoa was being constantly appraised, but “at this point in time, the value of Agoa is still greater than the costs of making this accommodation in the poultry industry.”

Had South Africa failed to reach an agreement, the issue was likely to have emerged as a key feature of an ‘out of cycle review’ of South Africa’s continued Agoa participation, as proposed in the US Senate’s version of the Bill to reauthorise the unilateral trade concession to qualifying African countries. The Senate proposal, which still had to pass through Congress, was for the review to take place 30 days after Agoa was signed into law.

“There are other outstanding issues, but the poultry issue was very sharply raised by Congress. So I think that, having settled this [dispute], we feel that we are in a stronger position than we would have been. But, of course we will have to see how the process unfolds from now on,” Davies concluded.

The two governments also agreed in Paris to use the bilateral Trade and Investment Framework Agreement as the main mechanism for resolving outstanding trade matters.