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Davies vows to rescue SA's ailing poultry industry

Feb 15 2017 18:34
Liesl Peyper

Cape Town – South Africa’s poultry industry will be protected against the “surge of imports” otherwise there may be no industry left, said Rob Davies, Trade and Industry Minister on Wednesday.
 
Davies was the first speaker in the second round of debates on President Jacob Zuma’s State of the Nation Address (SONA) delivered last Thursday.
 
“We’ve established a task team to address the challenges in this sector,” Davies said. “Poultry producing countries have a surplus of brown meat, which they can’t sell in their own markets and they therefore export it to other countries in the developing world just above the marginal cost. This causes distortions.”
 
Davies said South Africa could learn from other African countries, such as the Ivory Coast and Cameroon where the poultry industry was practically destroyed because they did not act against imports.
 
He added that South Africa will need to take a stance against particular provisions laid down by the World Trade Organisation (WTO).
 
“But the reality is that in the WTO ideas are being shaped by the dominant industrialised economies. Global trade is taking place in an uneven manner. Although countries such as China could take advantage of world trade, others were obliged to cut tariffs and open up their markets,” Davies said.
 
South Africa also needs to be aware of certain political trends in the immediate future. “What we see is the emergence of a backlash from the developed world into a new area of outright mercantilism with trade walls being erected between the major economies that will impact all of us,” Davies said.
 
“We’re going to see a blatant pursuit of regional trade agreements. How should South Africa respond?”
 
According to Davies, South Africa can’t afford to become overly protectionist.
 
“If we break trade rules, there’ll be consequences and retaliation. But we need to be smarter and more resolute to defend our own national interests. We have the right to take tariff decisions that will benefit us and we should have the courage to say no to those who try to restrict our policy tools.”
 
Davies said the African Growth and Opportunity Act (AGOA) that South Africa and a number of other African countries have with the United States is a 10-year agreement. “The Act can be reviewed, but only by the (US) Congress.”
 
He further said that Brexit means South Africa needs to prepare for new trade arrangements with the UK.
 
“There may be some advantages (emanating from Brexit). The country is for example less restrictive in the agricultural sphere, although South Africa needs to take cognisance of (the imposition) of quotas that will form part of economic partnerships.”

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