US wins chicken fight with China

by Meat&Poultry Staff
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WASHINGTON – The United States won a major victory at the World Trade Organization when a dispute resolution panel found that China violated numerous global trade rules when it imposed anti-dumping duties against US broiler chicken products.

The panel found, among other issues, that:

• China did not use books and records from Tyson Foods Inc. and Keystone Foods in calculating their cost of production.
• China relied on flawed pricing information to determine the damage done to its domestic broiler producers.
• The Chinese government failed to disclose essential facts to US companies, such as how China calculated dumping margins.

“This decision sends a clear message that the Obama Administration can fight and win for American farmers, businesses, and workers in the global trading system, ensuring that America gets the benefit of the rules and market access we have negotiated in our international trade agreements,” said US Trade Representative Michael Froman. “WTO Members must use trade remedies strictly in accordance with their commitments, and we hope that this win will discourage further violations that hurt American exporters.”

The dispute began in September 2009 when China alleged that US chicken unfairly benefited from low corn prices and used average cost accounting to document that chicken leg quarters were sold to China at prices below the cost of producing a whole carcass chicken. WTO has previously ruled that average cost accounting is not an acceptable methodology to determining whether a particular part of chicken or similar animal was “dumped” into an export market.

Exports of US broiler chicken products tumbled 80 percent following China's implementation of the anti-dumping duties.

“Agricultural exports continue to be a strong and growing component of US exports,” said Agriculture Secretary Tom Vilsack. “Farm exports in fiscal year 2012 reached $135.8 billion and supported 1 million jobs here at home. More than $23 billion worth of those agricultural products went to China alone. But 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.

“This is an important victory today for the US poultry industry, and for American farmers and ranchers,” he added.

The USA Poultry & Egg Export Council (USAPEEC) said the WTO panel's decision vindicated the US poultry industry and its decision to act immediately to address the problem before other countries pursued a similar course.

“We immediately realized the long-term implications that this case could have had for our industry’s exports,” said Jim Sumner, president of USAPEEC. “We knew that we could not wait to act. That’s why when this case was initiated three years ago, our board and executive committee did not hesitate to hire the best legal counsel available to pursue our options on behalf of our industry, realizing that USAPEEC would bear the brunt of the unbudgeted expenses.”
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