United States Trade Representative Ron Kirk announced that the United States is requesting that the World Trade Organization (WTO) establish a dispute settlement panel to address China’s imposition of antidumping (AD) duties and countervailing duties (CVD) on imports of chicken “broiler products” from the United States. China imposed these duties in August and September of 2010, claiming that U.S. broiler products were subsidized and sold at less than fair value (i.e., “dumped”) into the Chinese market. Prior to the imposition of these duties, the United States was the largest exporter of broiler products to China. Since the imposition of duties, U.S. exports have fallen by nearly 90 percent.

“The United States will not stand idly by while China appears to have misused its trade remedy laws and put American jobs at risk,” said Ambassador Kirk. “We are serious about holding China accountable to its WTO commitments and ensuring that there is a level playing field for American businesses – including our farmers.”

Although WTO rules permit China to impose duties on imports of merchandise that are subsidized or dumped – provided those imports cause injury to the domestic industry – they also require WTO Members to follow specific procedures and apply defined legal standards when conducting the investigations that determine whether duties are warranted. The U.S. panel request alleges that Chinese authorities failed to abide by applicable procedures and legal standards, including by finding injury to China's domestic industry without objectively examining the evidence, by improperly calculating dumping margins and subsidization rates, and by failing to adhere to various transparency and due process requirements.

Requesting a panel is the next step in the WTO dispute settlement process after requesting consultations. On Sept. 20, 2011, the United States requested consultations with China regarding China’s imposition of AD and CVD duties on chicken broiler products. Consultations were held in Geneva on October 28, 2011, but were unable to resolve the dispute.

Background

On September 27, 2009, China’s Ministry of Commerce (MOFCOM) initiated AD and CVD investigations on chicken broiler products from the United States. Based on its findings, MOFCOM imposed on these products AD and CVD duties on September 26, 2010 and August 30, 2010, respectively.

In the AD investigation, MOFCOM imposed dumping duties ranging from 50.3 percent to 53.4 percent for the participating U.S. producers, and set an “all others” rate of 105.4 percent. In the CVD investigation, MOFCOM imposed countervailing duties of between 4.0 percent and 12.5 percent for the participating U.S. producers and an “all others” rate of 30.3 percent.