WASHINGTON, May 10, 2016 - The U.S. is again challenging China at the World Trade Organization over the country’s antidumping and countervailing duties on U.S. broiler chicken, U.S. Trade Representative Michael Froman announced Tuesday.
The U.S. poultry industry has lost roughly $800 million per year since China began levying its duties on U.S. chicken in 2010, according to USTR officials who predicted they have a strong case against China.
China still buys chicken paws and wing tips, from the U.S., but total U.S. exports dropped by about 90 percent over two years after China began levying the duties on broilers, USTR officials said.
"Today’s action holds China accountable for unfair taxes they are imposing on American exports of broiler chicken products,” Froman told reporters during a press conference on Capitol Hill. “These unfair and unjustified taxes are in direct violation of China’s international commitments and tilt the playing field further against America’s poultry farmers.”“American farmers deserve a fair shot to compete and win in the global economy and this Administration will continue to hold China responsible when they attempt to disadvantage our farmers, businesses and workers.”
U.S. broiler exports worldwide are still strong even without the Chinese business. According to USDA’s latest forecast, exports are expected to reach about 7.5 billion pounds this year, up from about 7 million pounds in 2015. However, the chicken industry said it is very grateful for USTR’s announcement that it is seeking consultations with China through the WTO.
“We are heartened to see that USTR will not back down when it comes to enforcing our rights, and in making sure we truly get the market access we bargained for,” the National Chicken Council and the USA Poultry & Egg Export Council said in a joint statement released today.
USTR officials said they are hoping China will agree to lift the duties early in the consultation phase of the challenge – China has 15 days to enter into consultations – but the USTR is prepared to request a WTO dispute panel if the issue can’t be worked out between the two countries, a U.S. trade official said.
“We are ready to litigate,” the official said.
Zippy Duvall, president of the American Farm Bureau Federation, said in a release that “China’s actions (have kept) U.S. poultry from being sold to Chinese consumers at a price that reflects a fair profit for American farmers and real value for its own citizens.”
“Trade enforcement is an essential part of an effective trade policy,” he continued. “We applaud USTR for pursuing this action.”
This isn’t the first time the U.S. has challenged China’s duties on U.S. chicken. The U.S. first took China to the WTO in 2011 and won. At the time, China had imposed antidumping duties between 50.3 percent and 53.4 percent and countervailing duties that ranged from 4 percent to 12.5 percent, according to the USTR.
After the U.S. won its first challenge in 2013, China “re-determined” the duties on U.S. chicken, but the USTR was far from satisfied. “The countervailing duties dropped to about 4 percent for most U.S. exporters,” USTR said. “The antidumping duties either declined slightly or in some instances increased.”
Sen. Tom Carper, a Democrat from the major poultry-producing state of Delaware, said he expects a U.S. win at WTO.
“In this case we know we’re right,” said Carper, who stood next to Froman and Sens. Chris Coons, D-Del., Johnny Isakson, R-Ga., and John Boozman, R-Ark, for the Tuesday announcement. “We’re not going to let it go.”
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