U.S. asks for WTO panel in poultry spat with China

Reuters News
Posted: Dec 08, 2011 5:43 PM
U.S. asks for WTO panel in poultry spat with China

By Doug Palmer

WASHINGTON (Reuters) - The United States asked the World Trade Organization on Thursday to strike down duties that China imposed on U.S. poultry products in apparent retaliation for U.S. moves to restrict Chinese imports.

"The United States will not stand idly by while China appears to have misused its trade remedy laws and put American jobs at risk," U.S. Trade Representative Ron Kirk said in a statement just a few days before the tenth anniversary of China's accession to the WTO.

It is the 12th case the United States has filed against China since Beijing entered the world trade body on Dec 11, 2001. It comes as President Barack Obama has faced some criticism on both the right and the left for not taking a tougher line with China on trade.

China imposed the duties, ranging from about 55 percent to 135 percent, on U.S. chicken "broiler products" in August and September 2010, claiming they were subsidized and "dumped" in the Chinese market at less than fair value.

Beijing began the investigation that led to the duties on September 27, 2009 - just a few weeks after U.S. President Barack Obama's decision to slap an emergency 35 percent tariff on Chinese-made tires to stop a market-disrupting surge.

The duties were also seen as tit-for-tat retaliation for a U.S. congressional ban on cooked chicken from China.

The United States was the largest exporter of broiler products to China before the duties were imposed. Since then, U.S. broiler product exports to China have fallen by nearly 90 percent, the U.S. trade office said.

USTR spokeswoman Andrea Mead said China's "misuse" of trade remedy rules stemmed from its apparent failure to abide by WTO rules in calculating and imposing the duties.

"We cannot speculate as to what motivated China to initiate the investigations and impose the antidumping and countervailing duties," Mead said.

"Nevertheless, this does not change the fact that the U.S. government believes the duties to be inconsistent with numerous WTO rules. Accordingly, the U.S. government believes the duties should be removed as promptly as possible regardless of why they were imposed," she said.

But U.S. Ambassador to the WTO Michael Punke, last month in Geneva, said a pattern "has seemed to emerge of the Chinese government's reflexive resort to trade actions in response to legitimate actions taken by the United States or other trading partners under their trade remedies laws."

"This type of conduct is at odds with fundamental principles of the WTO's rules-based system," Punke said.

The proper course would be for China to challenge measures it believes are unjustified at the WTO, he said.

Beijing did bring a case against Obama's tire tariffs, but lost. A WTO panel said the move was allowed under an anti-surge provision that Beijing accepted when it joined the WTO.

Beijing also filed a case against the congressional ban on cooked chicken from China. Beijing won that case and Congress has let the provision expire.

The United States asked China for consultations on the latest poultry dispute back in September and the two sides held talks on October 28, but came to no resolution.

The Obama administration has brought five cases against China since taking office. The administration of former President George W. Bush initiated seven.

(Editing By Anthony Boadle and Cynthia Osterman)