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EU-SACU dispute on poultry import duties concludes as panel rules in favour of EU

EU-SACU dispute on poultry import duties concludes as panel rules in favour of EU

Staff Reporter

THE nearly four-year disagreement between the European Union (EU) and the Southern African Customs Union (SACU) regarding a safeguard measure imposed by SACU on EU imports of frozen chicken cuts, came to an end on Wednesday, 3 August, after the Arbitration Panel that was established to deal with the matter, ruled in favour of the EU.

The ruling comes after SACU adopted a safeguard measure in 2018 on frozen bone-in chicken cuts imported from the EU. The safeguard measure required increased import duties and the EU said that it affected €183 million (equivalent to about N$3,12 billion) worth of EU exports.

The EU questioned the legality of the measure and formally requested consultations with SACU on the matter in 2019. The consultations took place in September 2019 and in April 2020, the EU requested the establishment of a Bilateral Dispute Resolution Panel. The panel was officially established and started working in November 2021.

File photo for illustrative purposes only. Photo: Pexels.com

The EU argued that SACU’s safeguard measure was not in compliance with the requirements of the Economic Partnership Agreement (EPA) between the EU and the Southern African Development Community (SADC). The EU therefore challenged the legal basis and compliance of the measure with the EU-SADC EPA on a number of grounds and said that the measure amounted to illegal duties.

“While safeguard measures can legally be adopted in exceptional circumstances to temporarily counter surging imports that threaten domestic industry, these must at all times comply with the legal requirements set out in the agreement,” the EU explained.

According to SACU, the Arbitration Panel dismissed most of the EU’s claims, particularly those concerning the geographical scope of the safeguard measure, the requirement for an investigation, the adequacy of the information provided to the EU and the request for a refund of the duties paid by the EU.

SACU added that the panel also confirmed that the EU-SADC EPA makes provision for a safeguard regime that diverges from the World Trade Organisation’s (WTO) rules.

However, SACU confirmed, the panel upheld the EU’s argument claiming that SACU may not have considered additional factors related to the proportionality of the duty and the duration of the consultations that SACU conducted (including with the EU) before imposing the measure.

“The panel found that the safeguard measure was not proportionate and went beyond what was needed to remedy or prevent any serious injury or disturbances. Moreover, the delay between the investigation and the adoption of the safeguard measure was excessive and not in line with the EU-SADC EPA,” the EU added.

Despite ruling in favour of the EU in this regard, the panel did not compel SACU to take any further action to the safeguard measure, which expired on March 2022.

Nonetheless, the EU said that the commission will remain vigilant to ensure that the EU industry is not subjected to any further restrictions in the future, adding that the ruling sets a strong precedent for the imposition of similar safeguards under the EU-SADC agreement.

SACU said that the SACU Member States collective participation in the dispute resolution represents a “monumental achievement” for SACU as the Union successfully defended its rights and decisions taken in compliance with the EU-SADC EPA.

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