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U.S. launches second WTO complaint in China chicken trade dispute

By Reuters/David Lawder   May 11, 2016 | 08:38 am GMT+7

The Obama administration on May 10 brought a fresh challenge to China's anti-dumping duties on U.S. broiler chicken products at the World Trade Organization in an effort to bring the long-running trade dispute to a close.

The U.S. Trade Representative's office said it is making claims that China's anti-dumping and countervailing duties violate WTO rules, partly because China failed to properly calculate U.S. poultry production costs.

China also failed to conduct transparent investigations and breached WTO rules in its finding that U.S. poultry exports have injured Chinese producers, USTR said. The complaint seeks consultations with Beijing on the matter.

The complaint is the second U.S. WTO objection to China's 2010 imposition of anti-dumping duties of up to 105.4 percent, and anti-subsidy duties of up to 30.3 percent, on U.S. broiler chicken products.

In a statement posted on its official website on Wednesday, China's Ministry of Commerce said it regrets the action the U.S. has taken but will resolve the dispute in accordance with WTO processes.

It comes as U.S.-China trade tensions are rising, with China's economic slowdown flooding markets worldwide with exports of manufactured goods.

U.S. steel and aluminum producers have filed several major anti-dumping complaints against China in recent weeks with the U.S. Commerce Department and International Trade Commission.

"Today's action holds China accountable for unfair taxes that they are imposing on American exports of broiler chicken products," U.S. Trade Representative Michael Froman said in a statement.

China re-examined and lowered the duties on U.S. broiler chickens in 2014 after the WTO accepted U.S. arguments that they violated WTO rules. China currently levies anti-dumping duties up to 73.3 percent and anti-subsidy taxes up to 4.2 percent.

But Froman said a USTR review of China's revised duties, which affect producers including Tyson Foods and Pilgrim's Pride, found they were still not in compliance with WTO rules.

U.S. Acting Deputy Agriculture Secretary Michael Scuse said that U.S. poultry producers have lost over $1 billion in sales since the duties were imposed in 2010, with annual U.S. chicken exports to China down over 90 percent.

China's Ministry of Commerce (MOFCOM) on its website did not immediately respond to the U.S. complaint. MOFCOM is also conducting an anti-dumping investigation into U.S. exports of distiller's dried grains, an ethanol by-product used in animal feed.

U.S. Senator Johnny Isakson, a Republican from Georgia, the largest chicken-producing state, hailed the new WTO complaint, the 12th such challenge against China by the Obama administration.

"Trade works when the rules are followed, and it is imperative that China, the world's second-largest economy, lives up to the rules it agreed to when it joined the WTO in 2001," Isakson added