Africa Economy: S. African poultry industry cautious over arrival of U.S. products

The South African Poultry Association (SAPA) on Friday cautioned against the arrival of the first consignment of chicken products from the United States.

"The chicken portions being imported from the U.S. have higher food safety risks than products from other exporting countries,"SAPA's CEO Kevin Lovell told Xinhua.

The arrival of American poultry products in South Africa is a prerequisite for Pretoria to continue benefiting from the African Growth and Opportunity Act (AGOA).

South Africa was under pressure to open its market to certain meat products from the U.S. or face compromising agricultural benefits under the AGOA.

On Thursday, Minister of Trade and Industry Rob Davies said South Africa has concluded trade negotiations with the United States, thus securing Pretoria's position in the AGOA for the next 10 years.

Last Friday, the first shipment of American poultry (frozen chicken legs) arrived at the Port of Durban and was cleared by the Port Health Authorities, thus allowing the products to be placed on South Africa's retail shelves before the deadline of March 15, 2016, Davies said.

U.S. President Barack Obama set the deadline last year, threatening to suspend South Africa's agricultural benefits under the AGOA if American poultry products were not placed on South African shelves by March 15.

U.S. Trade Representative Michael Froman has communicated his satisfaction to Davies, according to the Department of Trade and Industry (DTI).

Froman has indicated that he will recommend that Obama lift the threat of suspension of South Africa's agricultural concessions under the AGOA, the DTI said.

However, Froman did not announce the lifting of the suspension, saying Obama was assessing the situation. But Obama's announcement appears to be a formality, expected probably by Thursday.

"We are delighted by the announcement from USTR (US Trade Representative) Froman today and we welcome the arrival of American chicken into commerce in South Africa. The entry of U.S. poultry into South Africa was required as a condition for avoiding South Africa's suspension under AGOA," US ambassador to South Africa, Patrick Gaspard said in a statement.

"Now that the issues involving AGOA have been resolved, we are focused on developing a broader, stronger economic partnership with South Africa, and we believe that expanding trade and investment in both directions is the best way to do so," the statement said.

As the SA government lauded the conclusion of trade negotiations with the U.S., voices of disagreement emerged.

Importing poultry from the U.S. as per AGOA will affect the livelihoods of small farmers and cost the country thousands of jobs, the Inkatha Freedom Party said.

"The dumping of foreign food into South Africa must be stopped forthwith," IFP's Nsikayezwe Cebekhulu told Xinhua.

South Africa used to block chicken imports from the U.S. because of outbreaks of avian flu in parts of the U.S. and because of concerns about salmonella infection. It has also been citing concerns about diseases in pork and beef to block imports of those products.

The AGOA, a legislation that was approved by the U.S. Congress in May 2000, is to assist the economies of Sub-Saharan Africa and to improve economic relations between the U.S. and the region. The Act provides trade preferences for quota and duty-free entry into the U.S. for certain products.

Although the U.S. renewed the AGOA for another decade in July, Washington is currently conducting an out-of-cycle review of SA's participation in the programme.

Bilateral trade between South Africa and the U.S. increased from about 130 billion (about 9.7 billion dollars) in 2013 to 141 billion rand (about 10.6 billion dollars) in 2014.

The United States enjoyed a trade surplus with South Africa in 2014, for the first time since 2009. Endit