South Africa’s citrus industry is tied up in a waiting game. While the European Union has ten calendar days to respond to a request for consultation by the South African department of trade, industry and competition, tonnes of Mzansi’s best oranges could perish in European harbours.
The top-quality fruit from Mzansi is being held back by European port authorities because of brand-new phytosanitary regulations in the EU: much more restrictive than before, rushed through, and “misinformed” or “politically motivated” according to local experts.
The move shook South Africa’s export farmers and have, according to Citrus Growers Association CEO Justin Chadwick, already resulted in the local industry losing around R200 million in damages and profit losses.
The new legislation, experts have continuously pointed out, will not only block South African oranges from competing in the European market, but also threatens the sustainability and profitability of local growers and the 140 000 jobs the industry sustains locally.
After several failed attempts by the local industry to get the regulations reversed, the Permanent Mission of South Africa to the United Nations and other International Organisations wrote to Joao Aguiar Machado, ambassador of the EU to the World Trade Organisation (WTO) in Geneva, on 22 July 2022 to request consultations with the EU.
In an exclusive interview with Food For Mzansi, Chadwick details the next steps following South Africa’s trade dispute lodged against the EU.
Duncan Masiwa: 3.2 million cartons of citrus valued at R605 million are at risk of being destroyed by authorities in the EU. How long have they been there? Surely these oranges are losing market value?
Justin Chadwick: The fruit being held by EU authorities continues to deteriorate in terms of its quality, on a daily basis. Their value will continue to depreciate with every day that passes. While we cannot provide the market valuation of the fruit once it has been released, we can confirm that the local citrus industry has, to date, suffered around R200 million in damages and/or losses as a result of this crisis. Without urgent departmental intervention, the industry’s losses will continue to escalate.
What is going to happen to those cartons of oranges?
At present, both Citrus Research International (the CRI) and the Perishable Products Export Control Board (PPECB) have, in their assessment, concluded that approximately 900 containers of citrus fruit currently detained at EU borders, do in fact comply with the new EU regulations and simply require new phytosanitary certificates from the department of agriculture, land reform and rural development.
Unfortunately there are between 350 and 400 containers of citrus that the CRI and PPECB can confirm do not comply with the new regulations. The release of these containers will have to be assessed on a case-by-case basis. Both scenarios require urgent political intervention from department with immediate assistance towards the issuing of new phytosanitary certificates to ensure the release of complaint containers as speedily as possible.
The CGA continues to engage with the department and has recommended the establishment of a daily war room to commit both public and private-sector resources towards addressing this crisis.
What 21 inconsistencies did South Africa identify in the new proposed phytosanitary measures, which you believe go against the guidelines of the World Trade Organisation, and which you believe the EU is obligated to adhere to?
See attached excerpt of Ms Xolelwa Mlumbi-Peter’s letter to the EU’s Permanent Representative to the World Trade Organisation for the details relating to the 21 inconsistencies identified within the new drastic, and arguably misinformed regulations.
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What are the next steps in this high-level process?
In terms of procedure, the EU now has ten calendar days counted from the request date to respond to South Africa’s request for consultation, the first of which must take place within 30 calendar days from the initial date of request.
If there is absolutely no response from the EU, then South Africa can proceed to request a panel. If the EU responds, then the soonest we can request a panel is 60 calendar days counted from the request date. South Africa remains in control of the pace on this issue and can agree to longer consultation times if it so chooses.
We have also reserved the right to use the provision of the dispute rules that apply to perishable products, whereby consultations can be moved back to ten calendar days counted from the request date (down from 30) and can request a panel within 20 calendar days counted from the request date (down from 60).
Will this matter be resolved before the next export season, and what do farmers do in the meantime?
It is too soon to tell what the outcomes of the WTO dispute will be and what impact it will have on the phytosanitary requirements of citrus destined for export to the EU this year and next. Citrus growers are urged to do their best to comply with the new regulations at present, and to secure new phytosanitary certificates from department of agriculture, land reform and rural development, before shipping any additional containers to the EU for the remainder of this export season.
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