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Agricultural safeguard levy on poultry could impact SA consumers negatively
The latest gazetted agricultural safeguard levy of 35.3% imposed on bone-in chicken cuts has raised concerns for the Association of Meat Importers and Exporters (AIME). Europe, one of South Africa's largest trading partners, sees the safeguard as a blow to the preferential nature of its trade relations with South Africa, the costly effect of which will extend to the already cash-strapped South African consumer.
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"Considering the current economic climate in South Africa, this could not come at a worse time," says Paul Matthew, CEO Designate from AMIE. He adds: "SA, via the Southern African Customs Union (SACU), in its misguided attempts to protect its domestic poultry industry, has once again imposed a tariff on imports which will, as history has shown, be passed on to those that can least afford it: 'the local consumer'."
Matthew suggests that it contradicts article 34.2 of the Economic Partnership Agreement (EPA) between South Africa and the EU which clearly states that trade actions imposed in terms of this agreement must have risen during the tenure of the agreement. This is clearly not the case, as the alleged hardships caused to SA poultry pre-date the implementation of the EPA agreement. South Africa has thus violated these terms and is in serious breach of an international agreement.
Figures published by players in the local poultry sector reflect a highly profitable industry, generating huge shareholder returns and hardly in need of protection, says the AMIE.
South Africa could also be liable, according to the association, in that it has not adhered to the tariff implementation terms of the EPA, which states that before any implementation of such a safeguard, the proposed trade measures must be referred to a joint EU/SACU Trade and Development Council for discussion. This step in the process was totally ignored and omitted according to Matthew’s knowledge.
AMIE is currently studying the details of the safeguard and reviewing its options.
