WTO Rules Against Chinese AD/CV Duties that Cut U.S. Chicken Exports
U.S. officials announced Aug. 2 that the World Trade Organization has ruled against antidumping and countervailing duties China imposed in 2010 against U.S. chicken broiler products. The U.S. asserts that these duties – AD duties of 50.3% to 105.4% and CV duties of 4.0% to 30.3% - led to an 80% drop in its exports of these products to China.
According to a joint press release from the Office of the U.S. Trade Representative and the Department of Agriculture, a WTO dispute settlement panel found that China violated its WTO obligations in conducting these AD/CV investigations and imposing duties by:
- levying CV duties on U.S. producers in excess of the amount of subsidization;
- relying on flawed price comparisons for its determination that China’s domestic industry had suffered injury;
- unjustifiably declining to use the books and records of two major U.S. producers in calculating their costs of production, failing to consider any of the alternative allocation methodologies presented by U.S. producers and instead using a weight-based methodology resulting in high dumping margins, improperly allocating distinct processing costs to other products and allocating one producer’s costs in producing non-exported products to exported products;
- improperly calculating the all others rates;
- denying a hearing request during the investigation;
- failing to require the Chinese industry to provide non-confidential summaries of information it provided to the Ministry of Commerce; and
- failing to disclose essential facts to U.S. companies, including how their dumping margins were calculated.
If the panel decision is not appealed or is upheld on appeal, China will be asked to bring its measures into compliance with its WTO obligations. This presumably would mean the elimination of the duties at issue, which would reopen a $600 million market of which the U.S. had been the largest supplier prior to 2010.