WASHINGTON -- The U.S. poultry industry is noting its disappointment with the China Ministry of Commerce's (MOCOM) decision on Feb. 5 to impose preliminary anti-dumping duties on U.S. chicken.
"The U.S. industry prices its export products to China fairly. China has, nonetheless, determined to apply very high duties that will virtually eliminate U.S. chicken exports to China for the foreseeable future," said Jim Sumner, president of the USA Poultry & Egg Export Council.
It's been reported by Bloomberg and other news services that the tariffs could be imposed up to 105.4 percent, and could impact more than 35 chicken companies in the U.S., with Pilgrim's Pride potentially paying a duty of 80.5 percent, Tyson Foods with a duty of 43.1 percent and Sanderson Farms with a duty of 64.5 percent.
"In taking this action, MOFCOM has disregarded the information that 36 U.S. companies have provided that clearly demonstrates that U.S. chicken is not being 'dumped' on the Chinese market," Sumner said. "More than half of all U.S. exports during the period of investigation were chicken paws (feet), a product that Chinese producers do not produce in sufficient quantity to satisfy domestic demand.
"Paws are a product for which there is ordinarily no consumer demand in the U.S. When sold in the U.S. market, they are usually sold for rendering a few cents per pound. By contrast, paws are a popular consumer product in China, and so can be sold for 60 cents to 80 cents per pound to Chinese importers. When a product is sold at export for prices that are many times higher than the price for the like good in the home market, that is not dumping. In fact, it is the very opposite of dumping."
Also in reaction to the preliminary duties, the National Chicken Council, in a statement, adds that it disagrees, "that any chicken products have been sold below the cost of production or comparable price in the U.S. We hope that China will reconsider the information and reach a decision consistent with our mutual interest in free and fair trade."
"U.S. companies sold mainland China 693,830 metric tons of poultry products, including feet and paws, worth $620 million from January through November 2009," NCC added. "China was the United States' second-largest poultry export market in 2009, only slightly less than the top market, Russia."
As a result of the trade dispute, the Chinese marketplace for chicken paws will feel the effect of a significant lack of product.
"It's certainly unfortunate that Chinese consumers will suffer as a result of this conflict between our countries," Sumner said.
This duty dispute could potentially be the result of earlier trade disputes between the U.S. and China. Last fall, the U.S. imposed safeguard duties on tires made in China. The U.S. poultry and agriculture industries expressed their opposition to this duty in letters sent to the Obama Administration.
Sumner also noted that, "China has been offended by a congressionally imposed budget prohibition that prevents U.S. health authorities from evaluating whether cooked Chinese poultry products can be exported to the U.S. The U.S. industry opposed this and agreed with China that such a ban was contrary to international trade rules and inconsistent with U.S. obligations under WTO (World Trade Organization) agreements."
It's noted that since these two actions, China has made this decision to begin anti-dumping actions on the U.S. poultry industry.
"Unfortunately, U.S. poultry is a big target, and we have simply gotten caught in the cross-fire," Sumner added. "We have cooperated with China's poultry industry and have supported its right for access to the U.S. market, provided they comply with U.S. regulations. We've also tried to be supportive of free and open trade principles but nonetheless we have been the commodity that has been unfairly singled out in these disputes."
This issue will impact, and in effect halt, the exports of poultry from the U.S. to China for several months.
"We're hopeful that if Chinese officials study our submission in greater detail, they will conclude that U.S. chicken products were, in fact, not dumped," Sumner said. "We expect that MOFCOM will reach a final decision in this investigation within the next four months."
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