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Another chicken war looms in South Africa

| Supplier news

The poultry industry in SA, considered the country's biggest agricultural industry, is limping from one struggle to the next. This time it is a legal battle launched by the Association of Meat Importers and Exporters (AMIE).

The latest challenge comes as the industry shows signs of recovery from layoffs and factory closures, owing to difficult domestic market conditions believed to be exacerbated by poultry imports.

AMIE announced that it has launched legal proceedings against Trade and Industry Minister Rob Davies and the South African Poultry Association (SAPA).

It is seeking an order to review and set aside a decision by Davies to continue an investigation relating to the imposition of a 13.9% safeguard duty on bone-in chicken imports from Europe.

What is a safeguard?

A safeguard in International Trade Law is accepted to be a temporary import restraint used to protect the domestic industry from foreign competition.

Davies announced the safegaurd in December last year in an attempt to rescue the struggling local industry and to save jobs.

At the time, the local industry argued that 13.9% was insufficient and fell far short of the 37% safeguard duty that was applied through the International Trade Administration Commission (ITAC).

An investigation into possible dumping practices by the EU was also requested.

SAPA alleged that cheap EU poultry products are imported in South Africa at a price that local producers cannot compete with.

The TDCA

David Wolpert, AMIE CEO, said in statement that South Africa’s trade relations with the EU were until recently governed by a trade deal called the Trade and Development Corporation Agreement (TDCA).

He explained that SAPA lodged the safeguard application while the TDCA was still in force and this prompted an investigation by the ITAC, which was initiated by Davies.

However, before the investigation was completed, a new trade deal called the European Partnership Agreement (EPA) came into force on October 1 2016. 

"AMIE contends that a decision by the minister during December 2016 directing ITAC to continue with the investigation, historically initiated under the old TDCA in circumstances where it was subsequently repealed and replaced with the new EPA, to be unlawful."

Wolpert added that the importers further contend that Davies was wrong and should have stopped the TDCA process when the EPA came into effect.

A new EPA probe?

"He should, according to the importers, have started a brand new investigation under the terms of the EPA."

This conduct will strain South Africa’s relations with the EU member states, cautioned Wolpert.

"This will potentially have dire consequences for our export market, as trade partners are very unhappy about South Africa’s approach."

The Department of Trade and Industry did not respond to Fin24's requests for comment.

SAPA acting CEO Dr Charlotte Nkuna told Fin24 that AMIE's action is meant to restrict Davies in performing his duties.

"This is not the first time such action has been taken by importers which was ultimately unsuccessful, and we believe this latest attempt will also meet a similar fate."

Nkuna said instead of "futile" court actions, the EU should stop using South Africa as what she described a "disposal site for their surplus waste".

AMIE recently also threatened advocacy group FairPlay with a lawyer's letter over trashing imported poultry products.

"We believe that any allegations of dumping should not be made via wild allegations in the media, but through a formal investigation conducted by the ITAC," Wolpert told Fin24 at the time.

In response, FairPlay accused AMIE of attempting to intimidate and gag the lobby group.

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