China Accepts WTO Ruling
China is geared to re-examine anti-dumping duties on chicken imported from the U.S. The Chinese government reached this decision after the World Trade Organization’s (:WTO) unfavorable ruling against the country anti dumping duties.
China’s Ministry of Commerce initiated anti-dumping and countervailing investigations of imports of “broiler products” from the U.S. on Sep 27, 2009. Broiler products include most chicken products, with the exception of live chickens and chicken products such as cooked and canned chicken.
Although the U.S. offered to settle the disputes through consultations, the parties failed to reach a satisfactory conclusion. The U.S. appealed to the WTO for redressing China's violation of numerous procedural and substantive obligations under the WTO’s Anti-Dumping Agreement and Agreement on Subsidies and Countervailing Measures.
In Oct 2013, the WTO concluded that China had unfairly imposed tariffs on chicken imported from the U.S. Disputes between China and the U.S. over trade and the U.S. decision to levy tariffs on several Chinese products impelled China to turn against U.S. imports.
The decision has raised the hopes of U.S. meat processors like Tyson Foods Inc. (TSN), Pilgrims Pride Corp. (PPC), Sanderson Farms Inc. (SAFM), Omega Protein Foods (OME) and Cargill Inc. regarding increasing exports of meat products to China. According to the Wall Street Journal, Tyson has recently invested heavily to build its own farms in China. The farms, scheduled to become operational in 2014, will strengthen the company’s position in the booming meat processing market.
Moreover, the outbreak of avian influenza (bird flu) in the country has prompted people to refrain from buying local chicken products. This has opened up new opportunities for Tyson to increase export to China.
In Sep 2013, Cargill Inc. built a world-class integrated poultry operation in Lai’an Anhui, China. The project is part of the company’s continuous efforts to bolster its presence in China’s growing market and support the modernization of agriculture and food safety in China.
The Chinese Ministry of Commerce has decided to look into the evidence and information obtained in the original anti-dumping and countervailing investigations. Further, it will carry out reinvestigations through questionnaires, hearings and other measures.
U.S. chicken exports to China have plunged 80% after China imposed high anti-dumping duties.
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