US wins trade dispute with China over chicken parts

By Tom Miles and Charles Abbott, Reuters

GENEVA/WASHINGTON — The United States won a long-running trade dispute with China on Friday when the World Trade Organization found Beijing had broken global rules by imposing anti-dumping duties on U.S. chicken broiler parts.

The U.S. 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, and followed a U.S. ban on imports of Chinese cooked chicken.

The ruling could be a boost to U.S. poultry exporters. The U.S. complaint cited damage done to exporters like Pilgrim’s Pride, Tyson Foods Inc and Keystone Foods, a brand held by Brazil’s Marfrig Alimentos SA. An official with the U.S. Trade Representative’s office estimated that the United States 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 has had anti-dumping duties on Tyson, Keystone and Pilgrim’s Pride ranging from 43.1 percent to 80.5 percent, and a “weighted average” duty of 64.5 percent on imports from 32 additional U.S. 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,” U.S. Agriculture Secretary Tom Vilsack said at a press conference.

The United States had been the largest exporter of broiler products to China, but the duties cut its exports by some 80 percent. U.S. chicken exports to China in 2012 were 95,000 tons 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 said in a technical briefing on the case.

China’s Ministry of Commerce suggested it would explore possibilities for an appeal and said both Beijing and Washington had points of view that could win the support of experts. “China will conduct a serious evaluation and conduct follow-up work according to dispute resolution procedures,” the ministry said in a statement on its website on Saturday. Both sides, it said, “have some viewpoints that could win the support of the panel of experts,” a reference to dispute panels, made up of independent trade experts. China and the United States 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 U.S. President Barack Obama’s decision to slap an emergency 35 percent tariff on Chinese-made tires to stop a market-disrupting surge.

China challenged the tire tariff at the WTO, and lost. Within a week of the United States saying it wanted to litigate the broiler dispute, China slapped anti-dumping duties on more than US$3 billion worth of U.S. cars. Those duties are now the subject of a separate WTO complaint by the United States.