South Africa seeks WTO panels over EU discriminatory measures placed on citrus exports

South Africa has requested the establishment of two panels at the Dispute Settlement Body (DSB) meeting of the World Trade Organization (WTO) this week.

This was to examine what, in South Africa’s view, are unscientific and discriminatory measures placed on citrus imported from South Africa by the European Union (EU).

These steps addressed the EU’s regulations on two plant health issues: Citrus Black Spot (CBS) and False Codling Moth (FCM).

The South African government is challenging the regulations to protect the livelihoods of tens of thousands of people in the local citrus industry.

Currently, South African citrus growers are spending billions of rands per year to comply with CBS and FCM measures that the industry considers unscientific and unnecessarily restrictive, as South Africa already has an effective world-class risk management system that ensures safe citrus exports.

Emerging citrus growers are especially hit hard by the EU measures.

The request to establish the two panels is a significant development. This is the first time South Africa has progressed a dispute at the WTO beyond the panel state of the established DSB process.

On 15 April 2024, South Africa requested consultations with the EU on the CBS matter, which initiated a process that has ended without any results.

On FCM, South Africa initiated consultations in July of 2022 with no satisfactory conclusion.

A panel will now also be formed on the FCM matter.

While the EU did not accept South Africa’s request for the two panels at this time, the set DSB procedure is that the requested adjudication panels will be established at its next meeting in July 2024. A DSB panel report can usually be expected after nine months.

The Government’s representatives reiterated the legal basis of their complaints at the WTO headquarters in Geneva this week. These included the following arguments:

• The measures are not based on scientific principles and are maintained without sufficient scientific evidence.
• The measures are applied in a manner not by the Agreement’s provisions on the Application of Sanitary and Phytosanitary Measures, of which the EU is a signatory.
• The EU fails to apply the measures uniformly, impartially and reasonably.
• The measures are more trade-restrictive than required to achieve protection, and there are reasonably available technically and economically feasible alternatives that would gain protection in a significantly less trade-restrictive manner.

The SA Government has the support of the Citrus Growers’ Association of Southern Africa (CGA).

“Last year we exported 36% of all our citrus to the EU. That shows what an important market it is for our growers. It is the very foundation of citrus profitability in SA,” said Justin Chadwick, CEO of the CGA.

“Should the EU continue with the implementation of these measures, or intensify them in any way, the profitability of hundreds of growers will be negatively affected and the industry will suffer severe revenue and job losses,” Chadwick added.

“But this is also potentially good news for the European consumer. Their orange prices last summer were at an all-time high. However, if their supply is unfettered, consumers will benefit,” Chadwick continued.

Mooketsa Ramasodi, the Director-General of the Department of Agriculture Land Reform and Rural Development (DALRRD), also explained that the South African citrus industry supports 140,000 jobs at the farm level alone.

“The Government is acting to safeguard these livelihoods and the central role the citrus industry plays in so many of our rural communities,” Ramasodi noted.

“The EU’s measures on CBS and FCM are not justified, proportionate or appropriate. It must be understood, however, that the WTO process is not confrontational or aggressive. The goal is scientific truth and fairness,” Ramasodi added.

The acting director general of the Department of Trade, Industry and Competition, Malebo Mabitje-Thompson, further clarified the government’s actions at the WTO, noting that they are “making use of the WTO mechanisms available to them to find an amicable solution.”

The South African citrus industry is entering its peak export season, with oranges heading to the ports.

South Africa is estimated to export 170 million 15kg cartons this year. The exceptional quality of local citrus has made it sought-after internationally. South Africa is the world’s second-largest exporter of citrus.