The reauthorization of the African Growth and Opportunity Act will open the floodgates for U.S. chicken parts and undercut South Africa’s domestic industry with cheaper cuts of meat, local chicken producers fear.
AGOA, as the trade pact is known, was just reauthorized after South Africa agreed to remove “anti-dumping” protectionist tariffs in place since 2000.
U.S. senators Chris Coons and Johnny Isakson had threated to kill the lucrative U.S.-Africa agreement if the anti-dumping provision was allowed to remain.
Under AGOA, as much as 90 percent of South Africa’s exports – including cars, chemicals, citrus fruits, textiles, wine and nuts – enter the U.S. duty-free.
South Africa Trade Minister Rob Davies said the two countries had been negotiating a possible deal whereby the U.S. could export a capped volume of chicken in return for providing assistance with developing trade links. In the end, the U.S. won the right to export 65,000 tons a year to the South African market for the next 15 years.
Trade Minister Davies called the deal something “we can all live with”.
But according to the South African poultry association, they could lose close to 72 million dollars and about 6,500 jobs.
“There was no easy way out for South Africa. Either you defend the poultry industry or you defend AGOA. We had to find a balance,” said Kevin Lovell, head of the South African Poultry Association.
With its growing popularity, the rising demand for chicken had been straining local producers trying to keep up yet saddled with the high cost of feed, fuel and electricity.
In light of the concession made by South African poultry producers, there will be initiatives to try to manage the fallout from the likely reduction in sales of domestic chicken products, the trade minister said.
“There will be a package to support small black companies in the import of the US product and its packaging and further processing in our country,” the minister said. “We have been talking about a developmental package … which would include training of people in our poultry industry in the United States.”
U.S. Sen. Isakson called the end of South African tariffs on American chicken “a huge boon” for Georgia’s poultry industry. Georgia poultry will soon be headed for South Africa, he said.
Meanwhile, one of the signature dishes of South Africa’s poor townships is a stew called “walkie talkies”, made from chicken heads and feet. These parts are not popular in America and U.S. exporters could easily undercut local producers without the duties.