Chicken issues should not mar trade relationship between EU and SA

03 May 2017

Business Day, 03 May 2017
By Linda Ensor

The difficulties being experienced by the South African poultry industry should not undermine the mutually beneficial trade relationship the country has with the EU, a representative of the EU said on Tuesday.

EU trade and economics counsellor in SA Dessislava Choumelova spoke during the continuing engagement organised by Parliament’s trade and industry committee on the challenges facing the poultry industry.

Domestic producers blame the import of bone-in chicken portions from the EU for the crisis affecting the local industry, which has resulted in plant closures and retrenchments.

However, these imports have declined dramatically over the last few months due to outbreaks of avian influenza in several EU countries.

In December the South African Poultry Association successfully applied to the International Trade Administration Commission (Itac) for a safeguard duty which was set at 13.9%. Itac is now investigating whether to increase this duty further.

Choumelova stressed that in the EU’s view, the problems experienced by the poultry industry required an industrial policy rather than a trade policy response as they stemmed from the structure of the industry.

She highlighted the importance of the trade relationship between the EU and SA which was one of the few strategic partners that the EU maintained worldwide.

The overall trade balance between the EU and SA was currently almost neutral, which Choumelova said was a very positive development given SA’s trade deficit with the EU in the previous six years.

SA was ranked number 14 as an import partner with the EU and 18 as an export partner, with imports from SA into the EU growing by 17.8% between 2015-2016. SA had a trade surplus with regard to agri-food.

The EU imported €2.5bn of agri-food products from SA, representing 10.9% of total EU imports, and exported to SA €1.74bn representing 7.4% of EU exports. "This trade surplus contributes to positive results in SA’s current account," Choumelova said.