Argentina rallies to resolve S. African poultry dispute

20 Nov 2014

Representatives from the Brazilian Poultry Union (UBABEF), the Latin American Poultry Association (ALA), and the Center for Business Poultry Processors (CEPA) of Argentina met recently in Buenos Aires, Argentina to discuss the on-going trade dispute with South Africa.

There is an on-going struggle between SAPA (South African Poultry Association), Mercosur, CEPA, and UBABEF regarding poultry import tariffs. Recently, Cepa sent a letter to the International Trade Administration Commission (ITAC) stating discrimination and unfair treatment of Sapa’s application for a tariff increase to ITAC by including Argentina, Brazil, and Uruguay.

The letter seeks access to the investigation and suggests the application would devalue the Mercosur-SACU free trade agreement from December 2000, as well as the preferential trade agreement from April 2005. June 12, 2013 ITAC announced it would do a more detailed analysis of the situation and the information relating to production and financial situation of the local industry.

The dispute stems from an application sent by SAPA to ITAC in March 2013 seeking increases for up to the maximum bound rate of 82% from the current 27%, negotiated at the World Trade Organization (WTO) in order to protect its local industry from lower priced imports.

According to reports, South Africa is Argentina’s 3rd largest export market or 3% of South Africa’s total broiler imports. Sapa’s request for tariff increases is WTO compliant as long as the tariffs remain between the applied rate and the negotiated bound rate of 82%.

Applied rates range between 5% for boneless cuts and 27% for whole birds, carcasses, and offal. SACU (Southern African Customs Union) includes Botswana, Lesotho, Namibia, South Africa, and Swaziland. Mercosur includes member states Argentina, Brazil, Paraguay, Uruguay, and Venezuela, as well as associate members Bolivia, Chile, Colombia, Ecuador, and Peru.

Argentina is the 6th largest poultry meat exporter worldwide selling to over 60 countries and is forecast to export 315,000 MT in 2013.