U.S. Trade Representative Ron Kirk announced Tuesday that the United States has requested dispute settlement consultations in the World Trade Organization (WTO) over China’s antidumping and countervailing duties on U.S. chicken.  If consultations fail to resolve the issue in 60 days, the United States can request appointment of a dispute settlement panel.

“The United States does not arbitrarily seek disagreements with China,” said Ambassador Kirk at a news conference. “However, we will not stand still if we believe that China has violated its commitments as a WTO member and is therefore threatening American jobs. Our actions against China simply demonstrate that the United States is prepared to take every measure necessary to stand up for American workers by ensuring that China–or any of our other trading partners–does not misuse laws to prevent exports of U.S. products.”

China’s Ministry of Commerce responded that the duties are legal and in line with WTO procedures.

“China believes its antidumping and countervailing measures on US chicken products are in accordance with the law and conform to WTO rules,” the ministry said, according to the Xinhua news service.  “The Chinese side will carefully study the US request for consultations and properly handle the issue according to the WTO dispute settlement procedures.”

Since the tariffs were imposed, imports of U.S. chicken to China have fallen by 90 percent.  These tariffs are widely believed to be retaliation for U.S. duties of 35 percent on Chinese tires.

The U.S. poultry industry applauded the U.S. action and said the Chinese used an unrealistic yardstick in determining whether the product was being sold in China below the cost of production.

“The U.S. industry greatly appreciates the determination that Ambassador Kirk and his staff have shown to address this significant trade problem,” said a joint statement by the National Chicken Council and the USA Poultry & Egg Export Council (USAPEEC).  The action being brought is a trade remedy case that challenges the method by which China determined that the product was allegedly sold as less than normal value, the industry statement said.  The China case used “average cost of production” to determine normal value rather than using domestic U.S. market prices for comparable sales as is customary in antidumping actions.

“The use of ‘average cost of production’ reflects neither market realities nor the way in which companies in the industry commonly keep their accounts,” NCC and USAPEEC said.

USTR said that the Chinese determination against the U.S. companies and its imposition of nearly prohibitive duties were defective in many ways.

“The United States is concerned that China’s investigating authorities, in levying these duties, appear to have failed to adhere to their WTO obligations in numerous respects,” USTR said.  “In particular, China seems to have failed to observe numerous transparency and due process requirements, failed to properly explain the basis for its findings and conclusions, incorrectly calculated dumping margins, incorrectly calculated subsidy rates and made unsupported findings of injury to China’s domestic industry.”

USTR’s action drew immediate support on Capitol Hill, with House Ways and Means Committee Chairman Dave Camp (R-MI) and Trade Subcommittee Chairman Kevin Brady (R-TX) backing the move.

“I intend to hold a hearing this fall to examine the barriers China continues to throw in front of the goods and services we are trying to sell, and look forward to learning more about this case and other enforcement actions being pursued by USTR,” Camp said.

 

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