Photo by: Bloomberg
Two influential US senators, central to the so-called ‘chicken war’, have announced their intention to pursue amendments to the African Growth and Opportunity Act (Agoa) to secure greater access for US poultry into the SA market.
“We believe passionately in Agoa’s value and support its long-term renewal, but believe it unfair and inappropriate that the country that benefits from the law the most - South Africa - continues to maintain unreasonable tariffs on American poultry.
“The Hatch-Wyden-Ryan Agoa reauthorisation legislation contains strong, measured steps to ensure that this kind of unfair practice will not continue,” Senators Chris Coons and Johnny Isakson said in a statement sent to Fin24.
"SA's continued disrespect"
The two senators, who represent chicken-producing states, have in the past threatened to block South Africa from the lucrative Agoa trade agreement if the government fails to lift import duties on cheaper cuts of chicken.
In the US white chicken meat (chicken breasts) are sold at premium prices due to market demand. Bone-in chicken is a surplus product which allows the US to enter the SA market with cheaper prices.
South Africa has imposed anti-dumping tariffs of above 100% since 2000 on certain products derived from the chicken carcass.
Under current law, the US government only has one option for punishing an Agoa beneficiary that does not live up to the standards set in the law - complete termination of benefits.
At a Senate Finance Committee hearing on April 16 2015, Isakson questioned US trade representative Michael Froman about the ongoing dispute between the US and SA poultry industries.
According Coons and Isaksaon this option was rarely invoked, because it left the US government with no further tools for achieving an agreeable outcome. It is believed that the reauthorisation bill will empower the US administration to limit or suspend a non-compliant country’s benefits in a more incremental and targeted manner.
“We expect the US trade representative to utilise this new flexibility to level the playing field for American-grown and American-made products - including chicken - in South Africa. Working with a number of our colleagues, we are also developing additional amendment language reflective of our deep concern over South Africa’s continued disrespect for its trade relationship with the United States,” the senators continued.
Mutual benefits
The bill also allows the administration to initiate an out-of-cycle review of beneficiary countries to determine continual progress in meeting the eligibility criteria.
Additionally, there is a Sense of Congress provision that states that the president should initiate a review of South Africa or any other non-compliant beneficiary within 30 days of enactment.
On Thursday SA Minister of Trade and Industry Rob Davies assured an audience in Washington that a settlement on the contentious "chicken issue" is on the horizon.
He said the US and SA poultry industries were engaging on the issue and that the delegation was of the view that a settlement will be reached soon.
Davies described Agoa as a two-way agreement with mutual benefits for both the US and Africa and that the agreement generated enormous goodwill for the US on the continent.