Pascal Lamy, the director-general of the World Trade Organization (WTO), has appointed three experienced international trade experts to be on the dispute settlement panel that will hear the U.S. case against China assessing anti-dumping and countervailing duties against U.S. broiler products. The chairman is  Faizullah Khiji, Pakistan, and the two members are Serge Fréchette, Canada and Claudia Orozco, Colombia.

 On December 8, 2011, the Office of the U.S. Trade Representative (USTR) requested WTO establish a dispute settlement panel, and on January 20, 2012, the WTO Dispute Settlement Board agreed to form a panel.  At the same time, the European Union, Japan, Norway, Saudi Arabia, and Thailand reserved their third-party rights in the case.  Chile and Mexico subsequently received their third party rights.

In its filing with the WTO, USTR explained that the Chinese “measures appear to be inconsistent with various provisions of the anti-dumping agreement related to the process of the anti-dumping investigation as well as the anti-dumping duty determination at issue, including improper dumping and injury determination; improper reliance on the facts available; failure to provide access to relevant information; insufficient explanation of the basis for the determinations; absence of proper analysis of the effects of imports under investigation; and absence of objective determination of causality.”  Further, the United States claimed that the “measures appear to be inconsistent with various provisions of the SCM Agreement related to the process of the subsidy investigation as well as the countervailing duty determination at issue, including improper reliance on the facts available; insufficient explanation of the basis for the determinations; and imposition of countervailing duties in excess of the subsidy found to exist.”

WTO said that, if a case runs its full course to a first ruling, the process usually takes about one year, or 15 months, if the case is appealed.  WTO also noted that the schedule is flexible and, therefore, an extended schedule is quite possible.  Only about one of three cases are concluded by going through the full panel process.  Most cases are settled “out-of-court” or remain in a prolonged consultation phase.

China originally triggered the issue in  September 2009 when the Chinese government alleged that U.S. 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.

 

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