Senators urge South Africa to resume US poultry imports

U.S. Sens. Johnny Isakson, R-Georgia., and Chris Coons, D-Delaware, on September 11 urged South African President Jacob Zuma to act expeditiously to resolve remaining elements of the U.S.-South Africa agreement reached in Paris earlier this year and allow U.S. poultry exports to South Africa to resume.
A settlement was reached in the longstanding poultry dispute between the United States and South Africa on June 8, during negotiations in Paris led by the United States Trade Representative (USTR), the Department of State, U.S. Ambassador to South Africa Patrick Gaspard and trade experts from industry. The agreement was welcome news for the entire U.S. poultry industry, including the large poultry operations in both senators’ home states – Georgia and Delaware.
In a letter to the South African president, Isakson and Coons point to a number of unresolved issues that are hindering the successful implementation of the Paris agreement.
“Our understanding is that there are two processes that need to be completed in South Africa to implement the Paris agreement,” the senators wrote. “First, a rebate facility must be created to legally exempt the annual quota amount from antidumping duties. Second, the rules for allocation and administration of the quota must be developed through a transparent legal process.…We are also disappointed to learn that here has been no progress in addressing South Africa’s complete ban on U.S. poultry due to avian influenza.”
The pair expressed their disappointment in South Africa’s slow response since an agreement was reached. “Without these issues being addressed and in place,” the senators wrote, “U.S. companies cannot ship product, regardless of the other terms of the Paris agreement being reached.”
Senators Isakson and Coons, both members of the Senate Foreign Relations Committee, have pressured the South African government for over a year to end the antidumping duties. Most recently, the senators secured language in the reauthorization of the African Growth and Opportunity Act (AGOA) requiring the USTR to conduct a review of South Africa’s trade practices, specifically antidumping duties on U.S. poultry. The pair pointed to the ongoing review by the USTR as another reason for swift action to be taken by South Africa to complete those essential processes.
“As you are well aware, a review of South Africa’s eligibility under the African Growth and Opportunity Act (AGOA) is presently underway,” Senators Isakson and Coons continued. “You also know that it is crucially important to both of us that there be a successful and expeditious resolution of this issue so that the U.S. poultry industry can begin again to participate in the South African market.”
Under the current agreement, if not further delayed, American poultry products are expected to enter the South African market before the end of 2015.
Isakson and Coons are the co-chairs of the Senate Chicken Caucus. Both their states have large poultry industries and are major exporters of poultry. The poultry industry annually contributes over $15.1 billion to the Georgia economy, including farmers, processing, and allied industries.
A copy of the letter to President Zuma is available online here.

Mexican chicken prices to rise on US chicken import duties

Retail chicken prices in Mexico will rise by 22.4 percent and the meat consumer price index will increase by 7.2 percent if the Mexican government implements duties on U.S. chicken leg quarter imports, according to a study released that assessed the likely impact of the duties on prices and inflation levels in Mexico.
The study, conducted by Dermot Hayes, Ph.D., professor of economics and finance at Iowa State University, was conducted in response to a 2011 move by three Mexican poultry companies who petitioned the Mexican government to begin an antidumping investigation of imports of chicken leg quarters from the U.S., claiming that U.S. companies were exporting leg quarters to Mexico at below-market prices. The Mexican ministry announced its preliminary results with proposed duties on U.S. poultry ranging from 64 percent to 129 percent.
The loss of this enormous leg market would affect the U.S. chicken industry and competing meats. Mexico is the largest customer of U.S. poultry exports. If these tariff rates are indeed imposed in Mexico’s final determination, U.S. exports of chicken leg quarters to Mexico would decrease from about 250,000 metric tons per year to 0 and would result in the loss of hundreds of U.S. jobs and a loss of $275 million annually for the U.S. poultry industry.
The Mexican poultry industry will benefit most from these duties, according to the study. “This industry has grown at a far faster rate than the poultry industry in the United States because middle class Mexican households prefer domestically produced fresh poultry,” said Hayes. “It is ironic that the expansion in the number of middle class Mexican consumers is due in part to the free trade agreement that prompted this dispute.”
A public hearing is scheduled for May 15–16 in Mexico City arranged by the Mexican Unit of Foreign Trade Practices about the Mexican anti-dumping investigation against U.S. chicken leg quarters. Expected to take part in the hearing are the petitioners in the case, U.S. exporters and Mexican importers. The hearing is one of the last steps before the Mexican Unit of Foreign Trade Practices renders its final determination in the case, which will have to be reached by August under Mexican law.

US-India poultry trade barriers may cause World Trade Organization case

The U.S. has said it may take India to the World Trade Organization over what it believes are India's unfair restrictions of U.S. poultry imports based on false food safety claims, according to reports. The U.S. may open a case at the World Trade Organization to try to open the market. "Our American poultry is safe," said U.S. Trade Representative Ron Kirk. "There is no reason for them to deny us access. We are extraordinarily frustrated with India's continued non-application of internationally recognized scientific standards."

USDA inspection service prohibiting imports of birds from regions with avian influenza

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service has issued an interim rule prohibiting the importation of birds and poultry products from regions where any subtype of highly pathogenic avian influenza exists. 
Previous restrictions covered only the H5N1 subtype of avian influenza. APHIS is also adding restrictions for live poultry and birds that have been vaccinated for any H5 or H7 subtype of HPAI or that have moved through regions where any HPAI subtype exists.
Under the interim rule, live birds or poultry that have been vaccinated for any H5 or H7 subtype of avian influenza are prohibited entry into the U.S. These restrictions also apply to hatching eggs laid by birds or poultry vaccinated for the H5 or H7 subtype of avian influenza. Non-vaccinated birds, poultry and their hatching eggs imported into the U.S. must be accompanied by a certificate stating that the birds have not been vaccinated for any H5 or H7 subtype of avian influenza. The importation of live birds, poultry and hatching eggs that travel through areas where any HPAI subtype is known to exist is also prohibited.
Comments on the new rule will be accepted through March 25, 2011.

Obama to form export council

U.S. President Barack Obama will announce an export council to help him with a pledge to double exports in the next five years. According to the New York Times' Caucus politics blog, Obama is set to name a group of 18 leaders of business and labor to the council.
The council is part of the administration's progress report on its National Export Initiative. Among the successes cited in the report: agreements with China and Russia to reopen those markets to U.S. pork and poultry imports, respectively. During the first one third of 2010, exports rose almost 17% over the same period last year, the White House said.

Onishchenko: US-Russian poultry agreement close at hand

Russia’s consumer protection head Gennady Onishchenko told the press that negotiations over U.S. poultry imports to his country could produce an agreement within days, according to Reuters.
He said that the two countries are working together long-distance on the final details of ending Russia’s import ban on U.S. poultry, which went into effect in January as the result of a dispute over the use of chlorine in poultry processing.

Russia’s Cherkizovo set to increase poultry production 40% in 2012

Vertically integrated Russian meat producer Cherkizovo said it will be increasing production at its facilities in Penza in response to recent market developments, including a ban on U.S. poultry imports,The Moscow Times reported. "Cherkizovo welcomes the government of Russia's recent provisions aimed at stimulating demand for national poultry producers by reducing poultry import quotas and restricting the use of chlorine … in poultry processing," said Sergei Mikhailov, chief executive of Cherkizovo Group.
The Penza project would increase live-weight production from 60,000 metric tons to 120,000 metric tons annually and involve a new incubation facility and slaughterhouse. The expansion is expected to cost about $120M.
Cherkizovo could step up its poultry production 40% in 2012 thanks to the Penza expansion and another expansion in Bryansk, The Moscow Times said.