South Africa picks a fight with its biggest trade partner

South Africa, the world’s second-biggest citrus exporter, has asked the World Trade Organization (WTO) to set up two panels to adjudicate disputes over its citrus fruit exports to the European Union.

South Africa disagrees with EU measures taken against its exports to combat the incidence of Citrus Black Spot, a fungal disease, and the spread of the false codling moth, which damages the fruit.

South Africa maintains that citrus black spots cause blemishes on the fruit skin, but they don’t affect the quality.

In response, the European Union said it regretted South Africa’s decision to pursue panel proceedings in the two cases but maintained that its pest control measures are entirely justified,” the WTO said in a statement on Monday.

“The EU added that it was not ready at this meeting to agree to the requests for panels from South Africa.”

The request is South Africa’s first under the WTO’s dispute settlement system.

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 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. South Africa exports about $1.8 billion of citrus a year. Its biggest competitor is Spain.

Overall, South Africa exported about $2.5 billion of agricultural products to the EU last year and $13.2 billion to all destinations.

SOURCE:South Africa picks a fight with its biggest trade partner – BusinessTech