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South Africa: Concerns over levy on bone-in chicken cuts

Concerns are growing over South Africa’s decision to impose an Agricultural Safeguard levy of 35.3% on bone-in chicken cuts.

The move by the Southern African Customs Union has attracted criticism from the nation’s Association of Meat Importers and Exporters (AMIE), which said the measure could not have come at worse time.

The South African Customs Union is a customs union that covers 5 countries – Botswana, Lesotho, Namibia, Swaziland and South Africa and is the oldest existing customs union in the world, having been formed in 1910.

Paul Matthew, AMIE CEO designate, said South Africa’s largest trading partner – the European Union – viewed the Safeguard as a considerable blow to the preferential nature of trade relations with South Africa.

Photo: Shutterstock
Photo: Shutterstock

Mr Matthew said: “Considering the current economic climate in South Africa, this could not come at a worse time. South Africa via the Southern African Customs Union (SACU), in its misguided attempts to protect its domestic poultry industry, has once again imposed a tariff on imports, which will, as history has shown, be passed on to those that can least afford it: the local consumer.”

Mr Matthew suggested that the step contradicted article 34.2 of the Economic Partnership Agreement (EPA) between South Africa and the EU which clearly states that trade actions imposed in terms of this agreement must have risen during the tenure of the agreement.

Violation

This was clearly not the case, as the alleged hardships to South African poultry pre-dated the implementation of the EPA agreement. Therefore, South Africa had violated the terms and was in breach of the agreement.

There is anger also that the issue should have been referred to the joint EU/SACU Trade and Development Council for discussion but AMIE claims this was ignored.

South Africa is already at odds with the United States over chicken quotas. The South African Poultry Association wants the government to review the quota of US poultry imports, following the imposition of tariffs on local aluminium and steel products.

In court papers filed last month, the organisation claims the US tariffs have affected the benefits that South Africa enjoyed under its preferential trade deal. Under the deal, the US is allowed to export 65,000 tons of frozen bone-in chicken portions free of anti-dumping duty into South Africa.

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