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January 22, 2018

WTO rules in US favour over chicken tariff dispute with China

The US has come out on top in a preliminary ruling by the World Trade Organization on a long-running dispute with China over import tariffs the north Asian country imposed on broiler chickens.

By Dean Best

The US has come out on top in a preliminary ruling by the World Trade Organization on a long-running dispute with China over import tariffs the north Asian country imposed on broiler chickens.

Compliance proceedings were undertaken by the WTO in response to a challenge by the US asserting China continued to apply anti-dumping and countervailing duties on imports of broiler chickens from the US, despite making assurances in 2013 to comply with recommendations from the organisation’s dispute settlement body (DSB). The case dates back to 2011.

At a DSB meeting in July 2014, China claimed it had fully implemented the body’s “anti-dumping” recommendations and rulings, as well as those of the ‘agreement on subsidies and countervailing measures’ (SCM), while the US said the country had not fully complied. 

A WTO compliance panel published its findings on 18 January, and said: “We concluded that China acted inconsistently with certain provisions of the anti-dumping and SCM agreements.  Accordingly, China’s measures taken to comply with the DSB’s recommendations and rulings in the original dispute, at issue in this proceeding, are inconsistent with the relevant covered agreements. 

“China therefore failed to comply with the recommendations and rulings of the DSB to bring its measures into conformity with its obligations under the anti-dumping and SCM agreements.”

Reuters reported that China will now be obliged to lower its tariffs unless it appeals within 20 days.  

The news agency said Beijing imposed anti-dumping duties on US broiler chicken products of up to 105.4% in 2010, and anti-subsidy duties of up to 30.3%. China then lowered the tariffs in 2014 to a maximum of 73.8% and 4.2%, respectively, following another WTO ruling. But the US said they still broke the rules and went back to the trade body in 2016.

By that time, the US Department of Agriculture claimed poultry producers such as Tyson Foods and Pilgrim’s Pride had lost sales of over US$1bn, Reuters reported.

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