China-US Poultry Spat Making Feathers Fly

US & CHINA - Responding to a request from the United States for a World Trade Organization (WTO) panel to settle a dispute over duties on US poultry, Chinese experts said that China is aiming to provide a level playing field for domestic businesses, while the US government's move is aimed at winning votes from farmers in next year's presidential election.

12 December 2011

4 minute read

"Chinese poultry businesses have been seeking a fair and just environment because the large volume of cheap, imported poultry products from the US has seriously damaged the domestic industry, which is unfair to Chinese enterprises. Domestic poultry businesses are now enjoying a better environment after increasing their market share last year," said Ma Chuang, deputy secretary-general of the China Animal Agriculture Association.

On Friday, Bloomberg News reported that the US Trade Representative Ron Kirk had asked the WTO to set up a panel to settle the dispute with China.

In 2010, China imposed a five-year duty of as much as 105.4 per cent on US broiler-chicken products claiming they were sold in China below market price. The move was China's first anti-dumping and anti-subsidy claim against the US.

Mr Kirk said China had not followed the correct WTO procedures and the move had hurt about 300,000 farmers in the US, Bloomberg reported. The negotiations, the first step in the case, ended in October but reached no conclusion.

China imported 305,600 tons of US poultry products in the first half of 2009, a rise of 6.54 per cent year-on-year, and products from the US accounted for 89.24 per cent of China's total poultry imports or 10.96 per cent of the domestic poultry market, according to the Beijing Times newspaper.

"China's move did not violate WTO rules and the US dumping of poultry products, especially chicken feet and wings, reduced the profits of the domestic poultry industry, which is still in its infancy, and has affected the healthy development of the industry," said He Jinghua, director of the law firm, Beijing B&H Associates.

Because of dietary differences between the two countries, chicken feet, which are not eaten in the US, are popular in China and "remain the main source of profit for domestic chicken farmers".

He of B&H suggested that domestic poultry producers should use the time before the WTO makes a final ruling - a process that may take as long as three years - to improve and develop the industry.

Yao Weiqun, associate president of Shanghai WTO Affairs Consultation Center, said the WTO may accept the US claims, but that both parties can appeal if they are not satisfied with the ruling.

"The US move is, by nature, protective of the benefits enjoyed by its chicken farmers and it has a very strong political motivation towards winning votes from farmers as the US election approaches," Mr Weiqun said.

The poultry duty dispute may add more tension to trade frictions between the world's two largest economies.

The US Department of Commerce (USDC) made a preliminary ruling on Thursday to impose an anti-dumping duty of between 5.08 per cent and 26.23 per cent on imports of Chinese-made high-pressure steel cylinders, US imports of which were worth $48.8 million in 2010. The USDC will make a final ruling on the matter in February.