August 6, 2013
US wins tradedispute with China over chicken parts
The US won a long-running trade dispute with China when the World Trade Organization found Beijing had broken global rules by imposing anti-dumping duties on US broiler parts.
The US complaint, first raised in September 2011, was widely seen as one of a string of tit-for-tat disputes between the world''s largest economies followingthe US ban on imports of Chinese cooked chicken.
The ruling could be a boost to US poultry exporters. The US complaint cited damage done to exporters like Pilgrim''s Pride, Tyson Foods and Keystone Foods, a brand held by Brazil''s Marfrig Alimentos SA.
An official with the US Trade Representative (USTR) office estimated that the US has lost about US$1 billion in broiler product sales since the duties were imposed by China in 2010. Since 2010, the Chinese Ministry of Commerce hasimposed anti-dumping duties on Tyson, Keystone and Pilgrim''s Pride ranging from 43.1% to 80.5%, and a "weighted average" duty of 64.5% on imports from 32 additional US companies.
"China''s prohibitive duties on broiler products were followed by a steep decline in exports to China - and now we look forward to seeing China''s market for broiler products restored," US Agriculture Secretary Tom Vilsack said at a press conference.
The US had been the largest exporter of broiler products to China, but the duties cut its exports by some 80%. US chicken exports to China in 2012 were 95,000 tonnes, valued at US$113.5 million.
"China has 60 days to appeal. We''re going to press China to re-open the market," a USTR official saidat a technical briefing on the case.
China and the US have had a series of trade spats at the Geneva-based WTO. Beijing first said it might impose the chicken duties in September 2009, just weeks after US President Barack Obama''s decision to slap an emergency 35% tariff on Chinese-made tyres to stop a market-disrupting surge.
China challenged the tyre tariff at the WTO, and lost. Within a week of the US saying it wanted to litigate the broiler dispute, China slapped anti-dumping duties on more than US$3 billion worth of US cars. Those duties are now the subject of a separate WTO complaint by the US.
US Trade Representative Michel Froman said he hoped the latest win would "discourage further violations" of the WTO rule book.
China had justified its duties on chickens by saying US imports were unfairly subsidised and dumped on the Chinese market, causing material injury to China''s domestic industry. But the US challenged the ''opaqueness'' of how China conducted its anti-dumping case, including the calculations it used to conclude whether or not US chicken was being sold at a fair price in China.
The trade group''s panel found that China''s basis for defining dumping was ''flatly inconsistent with WTO rules'', the USA Poultry and Egg Export Council said in a statement.
"The WTO agrees with the US argument that China had arbitrarily calculated costs, and from there allowed itself to impose anti-dumping duties," the USTR official said.