China violated international rules by imposing duties on imports of U.S. chicken-broiler parts, the World Trade Organization said, ending a two-year dispute between the world’s largest economies.
A panel of the Geneva-based trade arbiter upheld most of the U.S. complaints that China improperly imposed anti-subsidy duties and tariffs to prevent the poultry products from being sold below cost, according to the decision posted today on the WTO website.
U.S. poultry exporters including Tyson Foods Inc. of Springdale, Arkansas, and Sanderson Farms Inc. of Laurel, Mississippi, have sought relief from the duties.
"We are pleased the WTO agreed with us that the tariff was improper," Mike Cockrell, chief financial officer of Sanderson Farms, said in a telephone interview. Sanderson is the largest publicly held U.S. chicken producer after Tyson Foods Inc. and Pilgrim’s Pride Corp.
The ruling is a setback for China as President Barack Obama’s administration challenges the nation over its trade actions. The U.S. and China -- the world’s largest economies -- have sparred on issues including clean-energy technology, autos and rare-earth elements in recent years.
China imposed the sanctions, of as high as 105.4 percent of the price of the goods, in 2010. The U.S. filed its WTO complaint against the tariffs in September 2011.
"China’s high anti-dumping and countervailing duties on imports of chicken ‘broiler products’ from the United States have been denying American chicken producers access to what was formerly a very valuable market," U.S. Trade Representative Michael Froman said. "Significant sales have been lost since these duties were put in place."
Poultry exports to China fell 80 percent after the duties took effect, according to the USTR.
The tariff on products other than chicken feet, also known as paws, made shipping to China "economically unfeasible," Cockrell said. Sanderson stopped exporting other chicken products such as dark meat, he said.
China may become a good market for dark meat if the ruling stands and the country removes the tariffs, Cockrell said.
The WTO panel circulated its findings to the U.S. and China in June, upholding an interim report from the previous month that said China had imposed the duties against international trade standards, Bloomberg BNA reported last month.
--With assistance from Shruti Date Singh in Chicago. Editors: Steve Geimann, Jon Morgan
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