South Africa puts biggest trade partner in its crosshairs over R20 billion and 100,000 jobs

 ·16 Apr 2024

South Africa said it has taken a preliminary step toward filing a complaint with the World Trade Organization (WTO) against the European Union over its treatment of citrus imports from the country. 

Two years ago, the EU imposed requirements for additional refrigeration of incoming fruit from South Africa, which lags behind only Spain as an exporter of the produce, to combat incidences of Citrus Black Spot, a fungal disease that leaves dark spots on fruit.

Last year, according to the Agricultural Business Chamber of South Africa, South Africa shipped $644 million of citrus such as oranges, lemons, grapefruit, and mandarins to the EU.

The EU’s moves increased costs and slashed shipments from South Africa, which competes with Spain for the citrus market.

South Africa maintains that citrus black spot, while causing blemishes on the fruit skin, doesn’t affect the quality.

It has also said that shipments to Europe have been falsely classified as being tainted with the disease.

“The action was initiated to find a lasting solution to the EU’s phytosanitary regulations,” South Africa’s trade and agriculture departments said in a statement Monday.

The EU has now been sent an official demand for consultations by South Africa over the measures that will be overseen by the WTO, the people said, asking not to be identified as a public statement is yet to be made. This is a step toward filing a case.

The dispute dates back to July 2022, with the Citrus Growers Association of Southern Africa last year saying that it would cost the industry over R500 million ($26 million) in lost exports as it couldn’t access enough specialised refrigerated containers in time to get the fruit to the European market. 

“The industry cannot afford the almost R2 billion that is needed to comply with the EU’s trade-restrictive regulations,” Thoko Didiza, South Africa’s agriculture minister, said in the statement. 

Justin Chadwick, the CEO of the Citrus Growers Association, said in the statement that the industry has the potential to expand to earn an additional R20 billion in exports a year and create 100,000 more jobs.

However, he added that it wouldn’t happen if the EU restrictions were maintained.

The EU mission to South Africa acknowledged requests for comment but are yet to respond. The WTO said it’s yet to be notified.

Overall, South Africa exported about $2.5 billion of agricultural products to the EU last year and $13.2 billion to all destinations. A third of its citrus exports go to the EU. 

Read: South Africa bleeds over R1 trillion in foreign investment

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