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SA makes sacrifice on Agoa poultry terms to save trade deal

| Economic factors

While it may hurt the domestic poultry industry, South Africa’s decision to concede on US chicken imports will save jobs in other sectors, said the special envoy on the African Growth Opportunities Act (Agoa).

Faizel Ismail today confirmed the trade deal, which has been in place since 2001 and was due to expire in September, would see 65 000 tonnes of US chicken imported into South Africa. 

South Africa and the US had been at loggerheads over the inclusion of US chicken imports in the trade deal, with South Africa arguing that the deal should be unconditional, while the US demanded greater access to local markets. 

South Africa’s concession over the weekend has paved the way for the renewal of the trade deal. Ismail said the citrus, motor, and wine industries were among the sectors benefiting from Agoa, and where jobs would be saved. 

The latest available data show South Africa exported around 30 000 pallets of oranges to the US in 2012. It also exported 31 942 245 litres of packaged and bulk wine to the country in 2013, the sixth-largest market behind Sweden, according to South African Wine Industry Statistics. 

Total vehicle industry exports of R17.1 billion went to the US last year, making it South Africa’s second-biggest trading partner after Germany. Under Agoa, motor components and cars exported to the US were not slapped with the usual import tariff of between 2.5% and 25%. 

Jack Hillmeyer, spokesperson of the US Embassy in South Africa, said there were still details to work out, including sanitary issues related to poultry, pork, and beef. But the agreement may prove to be good for consumers. 

“Chicken prices in South Africa have risen 13% over the last two years,” he said. “This trend indicates that there is space in the market for increased domestic production, and some imports that will not negatively impact overall market growth. The US is sympathetic to the development question and exploring industry-led plans.”

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