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South Africa selectively raises duties on five poultry items within WTO bound ceilings

16 November 2013

On 5 August 2013, South Africa’s International Trade Administration Commission (ITAC) “submitted its recommendation for an increase of import duties on five poultry products” to the South African government. These recommendations were made on the basis of the market situation in the whole of the SACU region. At the end of September, formal notification of the duty increases was published: the recommended duty increases were accepted and entered into effect from 1 October 2013.

Duties were increased most on products consumed by higher-income households. Whole birds, which constitute a small percentage of the SACU market, and boneless cuts – both of which are consumed primarily by higher-income households – were subject to the highest proportional increase in duties.

Poultry products consumed by poor households, such as offal and carcasses, were subject to relatively low rates of tariff increase, while bone-in portions, which accounted for 70% of domestic poultry sales and 54% of imports in 2012, were subject to an ad valorem duty rather than a specific duty.

A statement by the Department of Trade and Industry (DTI) argued that the duty increases had balanced the interests of domestic poultry producers with the consumption needs of poor households.

South African poultry tariff changes

Tariff line Product Share of imports % Existing duty      % Recommended duty %
0207.1.90 Whole bird 1 27 82 (bound rate)
0207.14.10 Boneless cuts 11 5 12
0207.14.90 Bone-in portions 54 18 (220c/kg) 37
0207.14.20 Offal 5 27 30
0207.12.20 Carcasses 2 27 31

Source: ITAC Report no. 442 and DTI media statement (see below)

Rob Davies, the Trade and Industry Minister, said that the new tariffs were introduced following an increase in imports and decline in domestic SACU poultry production. He maintained that the duty increases were “not directed at any particular country”, since they will apply to all countries exporting to South Africa except the EU, which has free access to the SACU market for the affected poultry products under the Trade, Development and Cooperation Agreement (TDCA). The Minister argued that “the use of the policy space provided by the WTO could not be considered to be protectionist.”

The South African Poultry Association (SAPA) welcomed the decision, but expressed disappointment that “the full tariff increases as applied for have not been implemented.” As SAPA had requested that the tariff be increased to 82% for all affected products, it expressed concern that the tariff increases would be “insufficient to stem the massive amount of imports”.

Chicken importers, in contrast, maintained that “the poor would bear the brunt of the duty increases.”

The DTI attached a number of conditions in its statement, including that:

  • the tariff increases would be subject to regular review to assess their impact;
  • the Minister expected established poultry companies to make “meaningful undertakings to support the development of small-scale poultry farmers” and to avoid any actions that undermined “fair competition in the domestic market”.

Editorial comment

It should be noted that the tariff increases do not apply to poultry product imports from the EU, given the provisions of the EU–South Africa TDCA which allow duty-free access for these products to the SACU market. The EU has been a major source of imports of poultry products since 2010, particularly for the largest category of imports, bone-in portions (54% of total poultry product imports). In 2012, the EU accounted for 69% of imports of bone-in portions, up from a 39% share in 2010. (See Agritrade articles ‘ Expanding EU poultry exports could increasingly target South Africa’, 8 September 2013, and ‘ South African poultry sector problems compounded by rising EU exports’, 15 April 2013.)

The fact that the new tariffs do not apply to imports from the EU poses a significant challenge, and could complicate South Africa’s poultry trade relations with major exporters such as Brazil and the USA.

In terms of intra-SACU trade in poultry products, it should be recalled that in April 2013 the Namibian government, acting under the Import and Export Control Act 1994, established a quantitative limit on poultry product imports into Namibia of 600 tonnes per month. The Namibian import restrictions are to be implemented via a system of import permits. The Namibian measures apply to imports of poultry meat from all sources, including South Africa and the EU. It is the use of these types of measure that the EU is seeking to restrict as part of the ongoing SADC–EU EPA negotiations. 

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