JOHANNESBURG – The SA Poultry Association (Sapa) has filed a lawsuit to force the government to suspend a quota that excludes some US imports of poultry from an anti-dumping rate, a senior official said on Tuesday.
If successful, the move – a response to the Trump government's decision to impose tariffs on imports of aluminum and steel – could risk access to the US market free of rights for an export value of nearly $ 2 billion (R28, 6 billion) to South Africa.
"We have pulled the trigger," Marthinus Stander, chairman of the broiler organization of Sapa, told Reuters, referring to the legal action that the association had threatened for more than a month.
Minister of Trade and Industry Rob Davies acknowledged that the government had received the documents relating to the legal case of the poultry group, but refused to comment further.
South Africa has a tariff on so-called "bone-in" poultry that is said to be exported by major world producers, including the US, at prices below production costs.
But in 2015 the government agreed to a quota that allowed around 65,000 tonnes of meat from American producers to be imported to South Africa each year for free.
South Africa has agreed to the deal to retain the benefits under the African Growth and Opportunity Act (Agoa) – the flagship trade legislation of the US for Africa – that offers eligible countries rights-free access to the US market for thousands of goods.
In 2017 more than $ 1.8 billion of South African exports, including a number that is now subject to 25 percent steel and 10 percent aluminum charges imposed by Washington earlier this year, were covered by Agoa.
The South African government has tried in vain to convince the Trump government to make an exception to the new rates.
The association of poultry farmers said the US rates violated the agreement on the quota for poultry.
"The quota has to be suspended if one of the benefits that South Africa enjoyed at the time of Agoa renewal is suspended, with steel and aluminum, which was previously tax-free," said Stander.
Others are against the position of Sapa
South African meat importers argue that the dumping of the tariff-free quota would push up prices for the consumers of the country and would likely cause retaliation by the American poultry industry.
"I do not think they're going to sit down," said David Wolpert, chief executive of the South African meat importers association AMIE SA, referring to American poultry farmers. "I think they will immediately lobby in Congress to take reciprocal action … There can be a domino effect."
– BUSINESS REPORT