US Chicken Farmers Call for Access to International Markets

US - On international trade agreements, US producers say they should provide both access and enforcement.
calendar icon 30 June 2014
clock icon 5 minute read

With the Obama administration actively negotiating new free trade agreements with Asia and Europe, the US National Chicken Council advisor, Kevin Brosch, testified before the Senate Committee on Finance last week about the effectiveness of the enforcement of any new agreements and the trade agreements the United States already has on the books.

“We are generally supportive of all major initiatives to promote free trade, but we must make sure both our existing agreements and new agreements provide not only strong market access but also adequate means to enforce that access,” Brosch said in testimony before the Senate Committee on Finance at the hearing 'Trade Enforcement: Using Trade Rules to Level the Playing Field for US Companies and Workers'.

“In our view, the prosecution of the China antidumping case before the World Trade Organization (WTO) represents US trade policy at its best; enforcing those trade rights for which we already have negotiated,” Mr Brosch said.

In 2009, China imposed anti-dumping duties on US chicken using the so-called 'weight-based cost of production' theory. Under this approach, all parts of an animal are given the same value per unit of weight; and so, hamburger has the same value as filet mignon; chicken paws have the same value as chicken breast meat. Clearly, this theory is economically unsound and, for several reasons, is legally impermissible under WTO rules.

Immediately after China announced its decision to impose anti-dumping duties, the Obama administration requested dispute settlement, and aggressively litigated the case before the WTO. Last summer a WTO panel ruled in favor of the United States. China elected not to appeal that decision and China’s announcement of how it will change its antidumping decision to come into compliance with WTO rules is expected in July.

Mr Brosch continued: “China represented a 700,000-metric-ton market for US poultry at the time the anti-dumping duties were imposed, and is potentially an even larger market for our products in the future. We are grateful to this administration for pursuing our rights in this case.”

But there have been some very significant disappointments and we have learned some difficult lessons over the past 20 years. Using examples of cases in Mexico, the European Union and South Africa, Mr Brosch said the first lesson is “that enforcement of trade agreements must become more automatic and timely.”

The example of the United States’ case against Mexico instituted nearly two years ago is a case in point.

He said: "An anti-dumping case which was also brought on the very dubious 'weight-based cost of production' theory. At present, NCC still does not have a panel to hear the case. We believe there is a significant problem here of enforcement that needs to be addressed."

The US poultry industry asked that the EU be taken to dispute settlement as there was no scientific basis for the EU’s trade barriers on US poultry imports, which began in 1996. For reasons that have never been explained, the United States and the EU have taken no actions to form a panel over the past four years, and there is no indication that our government is pursuing enforcement of the case at present.

Another long-standing problem has been with enforcement of our right against the unfair and protectionist practices of the Republic of South Africa (RSA). Because the United States has not challenged the RSA at the WTO and enforced our rights, we have been entirely shut out of the South African market for 15 years. The US poultry industry believes this must be addressed before Congress would be justified in extending the African Growth Opportunity Act programs.

Mr Brosch continued: “With respect to the Trans Pacific Partnership (TPP), our major goals are to get a strong commitment on enforcement, in particular in the area of sanitary and phytosanitary (SPS) measures. Our second major ambition is to see that the long-protected Canadian market is finally opened to trade, which should have been opened to free trade as a result of NAFTA. If TPP is truly a free trade agreement, then there should be free trade in poultry between the United States and Canada, not just one-way market access for Canada.

“We are frankly less sanguine about the prospects for poultry under the proposed Transatlantic Trade and Investment Partnership (TTIP) agreement with Europe. The ban currently imposed by EU regulations on importation of US chicken because of our safe and proven use of chlorinated water as an antimicrobial is not based on sound science and is inconsistent with WTO rules. TTIP would only be of use to our industry if the negotiations resulted in the removal of these SPS barriers that Europe has had in place for nearly 18 years.”

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