Delaware’s struggling chicken farmers could get relief if the U.S. succeeds in a new effort to get China to remove what the U.S. says are punitive tariffs on its imported poultry.
U.S. Trade Representative Ron Kirk said on Tuesday that the U.S. has filed a case against China with the World Trade Organization, alleging that China has violated WTO rules on transparency in imposing duties of more than 50 percent on chicken imports from the U.S.
The action is designed to protect as many as 300,000 American farm jobs, including some 13,000 in Delaware, where the economically important poultry industry has been battling rising feed costs and declining market prices.
The economic challenges led Seaford-based Allen Family Foods, a leading chicken processor, to file for bankruptcy in June after more than 90 years in the business. Some industry leaders predicted more failures in Delaware and beyond. South Korean meat producer Harim USA eventually purchased Allen Family Foods at auction for about $48 million dollars and the value of Allen inventory. Harim USA plans to continue operations at the Allen plant in Harbeson, Delaware using many Allen employees and contract growers.
The U.S. trade filing was welcomed by Delaware’s senior Senator, Tom Carper, who said the tariffs put U.S. chicken farmers at an unfair disadvantage.
“This hefty tax is misguided, harming U.S. poultry producers, including the chicken producers in Delaware who in recent years have counted China as one of our biggest foreign customers,” Carper said in a statement.
“While I still hope that China will see the error of its ways and lift these illegal restrictions on our poultry products, we’re looking to the World Trade Organization to step in and enforce the rules on the books so that American poultry producers and workers get a fair shake,” Carper said.
The duties, which began in 2009 and were made permanent in 2010, have cut U.S. poultry sales to China by almost 90 percent and cost the U.S. industry nearly $1 billion, according to Carper’s office.
As a first step, the U.S. is seeking dispute settlement consultations to challenge China’s imposition of antidumping and countervailing duties against imports of U.S. chicken broiler products – meaning whole chickens and various pieces of the meat.
“The United States does not arbitrarily seek disagreements with China,” Ambassador Kirk said in a statement. “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.”
China imposed the duties after determining that U.S. broiler products had been “dumped”, or sold at less than fair value into the Chinese market, as well as subsidized, the USTR said. WTO rules allow member countries to impose duties on goods that are found to be dumped or subsidized but those countries are also required to follow certain procedures before taking the action.
China appears to have failed to explain its findings, incorrectly calculated dumping margins and subsidy rates, and made unsupported findings of injury to its domestic chicken industry, the USTR said.
China imposed dumping duties ranging from 50.3 percent to 53.4 percent for participating U.S. producers and exporters, according to the USTR.
