USAPEEC States its Case in China-US Chicken Trade War

US - A statement from Jim Sumner, president of the USA Poultry and Egg Export Council (USAPEEC) says that the Council is disappointed in China's decision to impose a duty on imports of chicken from the US, adding that China's complaints are groundless.

8 February 2010

5 minute read

North America

The US poultry industry is deeply disappointed by the decision of the China Ministry of Commerce (MOFCOM) to impose preliminary anti-dumping duties on imports of chicken from the United States.

According to USAPEEC, the US industry prices its export products to China fairly. China has, nonetheless, determined to apply very high duties that will virtually eliminate US chicken exports to China for the foreseeable future.

In taking this action, MOFCOM has disregarded the information that 36 US companies have provided that clearly demonstrates that US chicken is not being 'dumped' on the Chinese market. More than half of all US exports during the period of investigation were chicken paws (feet), a product that Chinese producers do not produce in sufficient quantity to satisfy domestic demand. Paws are a product for which there is limited demand in the US so they usually sold for rendering. By contrast, paws are a popular consumer product in China, and so can be sold for $0.60 to $0.80 per pound to Chinese importers. When a product is sold at export for prices that are higher than the price for the like good in the home market, that is not dumping. In fact, it is the very opposite of dumping.

USAPEEC president, Jim Sumner, said: "We're hopeful that if Chinese officials study our submissions in greater detail, they will conclude that US chicken products were, in fact, not dumped. We expect that MOFCOM will reach a final decision in this investigation within the next four months."

US broiler exports (including chicken paws) to China were 753,908 metric tons in 2008, with an export value of $676.7 million, according to USDA. Exports for the first 11 months of 2009 were 665,547 metric tons, with an export value of $590.2 million, slightly below the previous year's export quantity and value.

In 2008, imports from the US accounted for 72.7 per cent of China's total broiler meat imports. Because other countries are not in a position to meet normal levels of demand in China for imports, there will be significant shortages in paws and other poultry products in the Chinese market.

Mr Sumner said: "It's certainly unfortunate that Chinese consumers will suffer as a result of this conflict between our countries."

He added that the US poultry industry has been the unfortunate victim of various trade disputes between the US and China. In most of these cases, the US poultry industry had no involvement in the disputes, and on several occasions has been sympathetic to the Chinese position. He noted that China has been offended by a congressionally imposed budget prohibition that prevents US health authorities from evaluating whether cooked Chinese poultry products can be exported to the US. The US industry opposed this and agreed with China that such a ban was contrary to international trade rules and inconsistent with US obligations under WTO agreements.

Also, China has expressed its anger with US policy after the US imposed safeguard duties on Chinese-made tyres. Again, the US poultry industry, along with a US agriculture coalition, opposed the proposed tariff in letters to the Obama Administration. It was after these two actions by the US that China initiated its anti-dumping actions against US poultry.

Mr Sumner explained: "Unfortunately, US poultry is a big target, and we have simply gotten caught in the cross-fire. We have cooperated with China's poultry industry and have supported its right for access to the US market, provided they comply with US regulations. We've also tried to be supportive of free and open trade principles but nonetheless we have been the commodity that has been unfairly singled out in these disputes."

China has also initiated a countervailing duty investigation against US poultry, alleging that US poultry benefits from subsidies provided by the US government. Sumner said that during the period of time covered by the investigation, corn and soybean prices were actually at record high levels. Not only did the poultry industry not benefit from government subsidies, in fact the industry paid record-high feed costs. As a result, no US poultry producer posted a profit in 2008.