US challenges China over WTO violation

By Aaron McDonald

- Last updated on GMT

The US government is challenging China over WTO violations, adding 'unfair' taxes on America's poultry producers
The US government is challenging China over WTO violations, adding 'unfair' taxes on America's poultry producers

Related tags: World trade organization, International trade, Poultry

US trade representative Michael Froman has announced that the US will be challenging China over breaching World Trade Organization (WTO) rules.

According to the office of the US trade representative, the Chinese government has failed to address its anti-dumping and countervailing duties against imports of US chicken broiler products.

Despite a WTO report claiming that these duties – which act as high taxes on US poultry exports to China – are breaching China’s WTO obligations, the Chinese government has not removed them.

On behalf of US poultry producers and their employees, Froman said the US government would be challenging these taxes.

This marks the 12th complaint brought by the Obama Administration against China at the WTO.

'Unjustified'

Froman said the challenge would hold China accountable for “unfair”​ taxes that are being imposed on US exports of broiler chicken products.

“These unfair and unjustified taxes are in direct violation of China’s international commitments and tilt the playing field further against America’s poultry farmers,”​ said Froman.

“American farmers deserve a fair shot to compete and win in the global economy and this Administration will continue to hold China responsible when they attempt to disadvantage our farmers, business and workers.”

According to US Secretary of Agriculture Tom Vilsack, food and agricultural products produced by American farmers and ranchers are among the most competitive in the world. Obama’s administration, said Vilsack, would not stand for trade barriers that put these producers at an “unfair disadvantage”​ in the global marketplace.

150 cases resolved​ 

“Thanks to the high quality of US agricultural goods, including chicken, the past seven years have been the strongest period for American agricultural exports in history,”​ explained Vilsack.

“Last year alone, the US Department of Agriculture resolved more than 150 trade-related issues, and agricultural exports supported more than one million American jobs both on and off the farm. I am pleased to stand with the USTR ​[United States trade representative] to show China and all our trading partners that the United States means what we say when we call for fair and enforceable trading polices.”

This challenge has been welcomed by several US senators. Senator Tom Carper said these taxes were preventing the state of Delaware’s poultry farmers and producers from reaching their global potential.

Holding China to account 

“China’s hefty tax on American poultry imports is unfair and, while I’m still hopeful that China will right this wrong on its own, we must be prudent and pursue action by the World Trade Organization. I thank Ambassador Froman and his team for their continued work to ensure the global community holds China accountable for its unfair trade practices.”

Meanwhile, Senator John Isakson, member of the Senate Finance Committee and co-chair of the Senate Chicken Caucus claimed that the US was the only country willing to challenge China’s compliance with the WTO.

“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. I am pleased that the United States is mounting this challenge that will, if successful, put the hardworking poultry farmers of this country back on a level playing field.”

Furthermore, Senator Chris Coons said that the country’s agricultural sector’s economic health was directly tied to its access to foreign markets, adding that was why it was “critical for the United Stated to fight unfair protectionist policies”​ against some of the world’s largest markets.

Cost 'failure' 

Senator John Boozman said that this challenge was “necessary”​ and a “step in the right direction”​.

In September 2013, the WTO favoured the US in more than a dozen claims in the report ‘China – Broiler Products’.

In response, China undertook a re-investigation and, in July 2014, issued justifications on its duties to US poultry products.

Following this, the US engaged closely with American stakeholders to review the next steps. After reviewing China’s redetermination, the US concluded that China’s reinvestigation and redetermination breached WTO rules and that the country had failed to bring its measures into compliance with WTO rules.

In the US’ consultation request, the US made claims under numerous provisions of the WTO Anti-dumping Agreement and the WTO Subsidies and Countervailing Measures Agreement. Among those claims were China’s failure to properly calculate costs of production for a US producer and the failure to conduct a transparent reinvestigation.

Related topics: Meat

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