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US Poultry Industry Commends Panel Decision on China's Anti-dumping Case

07 August 2013

US - The US poultry industry has welcomed the announcement by the World Trade Organization (WTO) that a dispute settlement panel has ruled that the anti-dumping and countervailing duties imposed by the People’s Republic of China on imports of US chicken are inconsistent with international trade rules.

The WTO panel made two important findings. First, it held that China’s basis for finding dumping– the so-called "average cost of production" theory – was flatly inconsistent with WTO rules. Under China’s approach, costs that are unique to a chicken product, such as breast meat, are spread over all products, artificially inflating their price.

The WTO panel firmly rejected that approach. Going further, the panel held that China failed to provide any justification for its approach over the costs kept in the US industry’s books and records. Second, the WTO panel found that China’s determination that US chicken imports were causing injury to the domestic industry is inconsistent with WTO rules and therefore are not subject to countervailing (anti-subsidy) or anti-dumping duties.

The decision of the panel vindicates the US poultry export industry, which trades and competes fairly around the world. It also validates the decision to act immediately and to invest the significant industry resources required to address this problem before other countries were tempted to pursue a similar course.

Jim Sumner, president of the USA Poultry & Egg Export Council (USAPEEC), praised the organization’s board of directors for having the foresight and the resolve to pursue the case.

"We immediately realised the long-term implications that this case could have had for our industry’s exports," he said.

"We knew that we could not wait to act. That’s why when this case was initiated three years ago, our board and executive committee did not hesitate to hire the best legal counsel available to pursue our options on behalf of our industry, realizing that USAPEEC would bear the brunt of the unbudgeted expenses."

Mr Sumner said that USAPEEC knew from its experience with a previous anti-dumping case brought against US chicken by South Africa in 2000 (where duties continue despite being ruled illegal six years ago by that country’s highest court) that failing to mount a quick and aggressive challenge could be much costlier in the long run.

Finally, the WTO ruling validates the poultry industry’s long support for the WTO, which provides an important venue for resolving international trade disputes in a fair and equitable manner.

Further Reading

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