US-South Africa trade deal threatens UK poultry exports

Exports of US bone-in poultrymeat are expected to resume to South Africa later this year, after the two sides struck an accord at a recent meeting in Paris.

The resumption of trade could have serious implications for the UK poultry sector, which has been building market share in South Africa.

This has provided an essential outlet for chicken legs, wings and quarters, which are less in demand in the domestic market.

US poultrymeat has effectively been barred from South Africa since anti-dumping tariffs were imposed in 2000.

This was despite the signing of the African Growth Opportunity Act that year, which granted preferential market access for 35 countries in sub-Saharan Africa to US markets.

See also: Challenges of setting up an egg farm in Africa

That Act is in the process of being renewed, and South Africa’s continued inclusion had been questioned by the US, in part due to the so-called “chicken war” between the two countries.

But that has now been resolved. It is understood the US will be given an initial quota of 65,000t a year, which may be imported at a much reduced tariff. In return, the South African poultry sector will be given assistance to develop further processing and training.

In an interview with French news service RFI, South African trade minister Rob Davies said the deal would make the US “a very prominent importer”.

“It will not just be that it will replace other imports, it will have an impact on local production,” he added.

Among those at threat are UK poultrymeat exporters. “The South African market has been a growing market for us,” said Maire Burnett from the British Poultry Council. “In 2011 we shipped 20,000t and by 2014 this had grown to 43,000t with a value of £36m.”

Trade was disrupted in late 2014 and early 2015, as the country imposed a blanket ban on UK poultrymeat following the outbreak of avian influenza in east Yorkshire in November. But this ban was lifted in late March.

“It’s good that we are back in South Africa, but it is only a matter of time before the US is back in too, and that will have a significant impact on the market,” said Ms Burnett.

UK product could struggle to compete, given the strength of sterling and the imposition of import duties on British chicken by South Africa in 2014.

A joint statement by US and South African trade representatives said it would still take some time to tie up the paperwork, “but both sides are committed to expedite processes and resume shipments of US chicken as quickly as possible”.