Mexico-US Poultry Talks Collapse20 April 2012
US & MEXICO - Behind the scenes negotiations to settle a poultry anti-dumping case filed by Mexican producers against their US counterparts have collapsed, leaving the trade dispute in the hands of Mexican government officials.
According to The Journal of Commerce, it is unclear what triggered the end of the bilateral talks.
Last year, Mexico’s largest poultry producers filed an anti-dumping complaint against US chicken leg quarters, alleging they were being dumped in Mexico at prices lower than they were sold in the US. A Mexican government agency in August made a preliminary finding in their favor and ruled US chicken meat should be subject to an import duty of 129.5 per cent. Although it had the power to do so, the Mexican government did not immediately apply the tariff.
Representatives of the US poultry industry spent months trying to negotiate an import quota level with its biggest customer that would allow it to avoid the expense of the trade litigation while retaining access to much of the market.
Such a quota does place a ceiling on future growth of US poultry sales in Mexico, but it would allow the trade to continue uninterrupted. In addition to the cost of putting on a legal defense in a trade case, the industry also stands to lose market share if a high duty is imposed.
“This system isn’t universally loved, but it is effective,” the industry representative said. “We have that system in place as part of the CAFTA (Central America Free Trade Agreement), and it has worked well.”
After the talks broke off, a bipartisan group of 16 senators wrote to US Trade Representative Ron Kirk, urging the US government to intercede and protect the US poultry industry.