Picture: BLOOMBERG/DANIEL ACKER
Picture: BLOOMBERG/DANIEL ACKER

SA’s recent poultry-tariff increases give European exporters an unfair advantage over their US competitors even though the country benefits from duty-free access to the world’s biggest economy, according to US trade representative Robert Lighthizer.

“That strikes me as completely crazy,” he said in a House ways and means committee hearing on trade policy on Wednesday.

The continent’s most-industrialised economy has duty-free access to the US market under the so-called Generalised System of Preferences (GSP), the US’s oldest and largest trade-preference programme for the world’s poorest economies.

The African nation raised duties on frozen bone-in chicken pieces to 62% from 37% for imports from all countries excluding those in the EU, with which it has a free-trade agreement, and the Southern African Development Community. SA also increased tariffs on frozen boneless-chicken cuts to 42% from 12%.

Increases in levies were effected to help protect local producers that sought measures to counter a flood of cheap shipments that contributed to annual losses of R6.5bn ($374m) for the local industry.

The move drew immediate criticism from the US government, which previously threatened to exclude SA from a preferential trade agreement after a disagreement over the levies in 2015. SA allows the US to ship a maximum of 65,000 tonnes of frozen bone-in chicken portions for free per year so it could remain a beneficiary of the African Growth and Opportunity Act (Agoa), which provides 39 sub-Saharan African countries with duty-free access to the US for about 6,500 products ranging from textiles to manufactured items.

The US wants its trade and investment relationship with SA to continue to grow, rather than shrink, the US Embassy in Pretoria said in an e-mailed response to e-mailed questions on June 12.

The US began a review of the SA’s market access under the GSP in January after the US trade representative accepted a complaint that the country’s draft new legislation failed to “provide adequate and effective protection” of US copyrights. A negative review could put as much as $2.4bn of SA exports at risk.

Bloomberg