WTO decides for U.S. in Chinese chicken dispute

WASHINGTON, Sept. 25, 2013 – United States Trade Representative Michael Froman today announced the World Trade Organization (WTO) adopted an August 2, 2013 dispute settlement panel report in favor of the United States in a major trade dispute with China, proving that China’s imposition of supposed antidumping duties on U.S. chicken “broiler” products violates international trade rules.  With the report now formally adopted by the WTO Dispute Settlement Body, China must bring itself into compliance with its WTO obligations.  In 2009 – the year before China imposed the duties – the United States exported over 613,000 metric tons of broiler meat to China.  Exports fell almost 90 percent after the imposition of the duties.

“This decision represents a significant victory for American farmers and chicken producers and proves that the United States will not stand by while our trade partners unfairly hurt U.S. exports and U.S. jobs,” said Ambassador Froman.  “Given the wide-ranging violations found by the WTO, I hope that China’s acceptance of the WTO’s decision without appeal signals a recognition by China that it needs to take a serious look at its trade remedies regime and bring its rules, procedures and practices into line with its WTO obligations.”

“USDA’s long-standing partnership with the Office of the U.S. Trade Representative has been instrumental in addressing barriers to U.S. agricultural exports, and today’s good news marks another accomplishment on behalf of U.S. producers,” said Agriculture Secretary Tom Vilsack.  “China’s prohibitive duties caused a steep decline in exports of high quality U.S. broiler products to China, and with today’s news from the WTO, we look forward to seeing China’s market for broiler products restored for U.S. farmers and chicken producers.”

Specifically, the WTO Panel found that China breached its WTO obligations by:

Levying countervailing duties on U.S. producers in excess of the amount of subsidization;

• Relying on flawed price comparisons for its determination that China’s domestic industry had suffered injury;
• Unjustifiably declining to use the books and records of two major U.S. producers in calculating their costs of production; failing to consider any of the alternative allocation methodologies presented by U.S. producers and instead using a weight-based methodology resulting in high dumping margins; improperly allocating distinct processing costs to other products inflating dumping margins; and allocating one producer’s costs in producing non-exported products to exported products creating an inflated dumping margin; and
• Improperly calculating the “all others” dumping margin and subsidy rates.

To view a full copy of the WTO dispute settlement report, click here.

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