US disputes China's trade sanction of chicken
Updated: 2011-09-21 10:55
By Chen Weihua (China Daily)
NEW YORK - While US President Barack Obama is traveling across the country selling his jobs program, US Trade Representative Ron Kirk announced on Tuesday that it has filed a case with the World Trade Organization against China in a bid to protect American agricultural jobs.
Up to 300,000 jobs are being threatened by China's imposition of duties on imports of American chicken products, Kirk claimed, urging China to "live up to its commitments and play by the rules to which it has agreed".
On Sept 27, 2009, the Chinese Ministry of Commerce initiated anti-dumping and countervailing investigations of US imports of chicken broiler products, which are various cuts of chicken. It imposed duties one year later.
The duties were based on China's findings that the chicken products had been sold for less than fair value in the Chinese market as well as subsidized. An investigation also showed that the US subsidized soybeans and corn for its poultry industry, hurting Chinese producers, the ministry said.
Prices of chicken broiler products in China were below the cost of production for a long time, suppressing domestic producers' profit margins, a direct result of the large volume of cheap imports, the ministry said in its September 2010 statement.
WTO rules permit member countries to impose duties on imports of merchandise that are found to be dumped or subsidized, if those imports cause injury to the domestic industry.
Under the filing, the US is requesting dispute settlement consultations - the first step in a WTO dispute - to challenge China's imposition of anti-dumping and countervailing duties against the import of US chicken broiler products.
A news release from the Office of US Trade Representative (USTR) says the US is addressing its concerns that China's duties appear to be inconsistent with WTO rules. Under WTO rules, parties that don't resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel.
USTR said before the imposition of the duties, the US was China's largest chicken broiler products supplier with over 600,000 tons of broiler products exported in 2009. But US exports of these products to China are down 90 percent since the duties have been enforced.
It cited industrial sources as saying that the US poultry industry will have lost some $1 billion in sales to China by the end of this year.
The chicken case is the latest of a series of enforcement steps the US has taken against China. The US has filed WTO cases against China in steel products, industrial raw materials, electronic payment services and wind power equipment as well as actions in the US to address rapidly increasing Chinese tire imports, according to the USTR.
"To be clear, the US does not arbitrarily seek disagreements with China. However, we will not stand still if we believe that China has violated its commitments as a WTO member and is therefore threatening American jobs - in this case hundreds of thousands of American poultry industry jobs," Kirk said.
Meanwhile, the US-China Business Council (USCBC) pointed out on Tuesday that blaming widespread US job losses on trade with China distracts from the real challenges facing the US economy and the trade relationship with China.
Referring to an updated study released on Monday by the Economic Policy Institute's (EPI), "Growing US Trade Deficit with China Cost 2.8 Million Jobs Between 2001 and 2010", USCBC Vice-President Erin Ennis said that the report "is still based on the faulty assumption that every product imported from China would have been made in the US otherwise. As USCBC has said in response to previous versions of EPI reports, this assumption is still decades wrong."
"The key is to make sure our companies and workers stay competitive and remain global leaders in manufacturing - and that means sensible innovation, education, tax, healthcare, and energy policies," Ennis said. "The answer is not to build walls around the US to isolate ourselves from our growing export opportunities with China - especially given the continued difficulties facing the US economy," Ennis said in a statement.
US exports to China in 2010 were a little more than $90 billion, up 32 percent from the previous year. China remains the third-largest export market for US goods, after Canada and Mexico, and has been the fastest growing market for US goods over the past decade.
Edward Alden, from the Council on Foreign Relations (CFR), is one of the authors of the Task Force Report on US Trade and Investment Policy released by the Council on Foreign Relations on Monday. Alden said the CFR Task Force called for the US government to use the available trade enforcement tools in cases where trade agreement partners, including China, appear to be violating their commitments. Clear and consistent enforcement of trade rules is needed to increase the confidence of Americans that open trade is working to their benefit.