April 4, 2012
Early in 2011, three Mexican poultry companies petitioned the Mexican government to begin an anti-dumping investigation of imports of chicken leg quarters from the United States, frivolously claiming that US companies were exporting leg quarters to Mexico at below-market prices.
The Mexican ministry recently announced its preliminary results; with proposed duties on US poultry ranging from 64% to 129%. Although these duties have not yet been applied, under Mexican law, a final decision will have to be reached by August.
This action is based on the "average cost of production" and assumes that every part of the chicken should be priced the same, for example, that the chicken feet have the same value as the chicken breast.
"This assumption is flawed and concerns us as members from poultry producing states," wrote the senators in their letter to Kirk. "The Mexican antidumping action will deprive our poultry industry of the market access provided under the North America Free Trade Agreement (NAFTA). This case sets an ominous example that must not be repeated throughout the protein sector. The same approach could encourage others in Mexico to institute frivolous antidumping actions against our beef, pork or dairy sectors."
With US poultry exports to China significantly decreased due to frivolous antidumping duties, Mexico is the US' most important market, importing nearly 250,000 metric tonnes in the most recent year valued at nearly US$270 million.
The National Chicken Council (NCC) supports reaffirming fair trade by having member countries adhere to WTO rules and hailed the latest move in relation to Mexico's frivolous anti-dumping charges.
"We thank this bipartisan group of senators for supporting US chicken and competing meats' interests in this unjustified case," said NCC President Mike Brown. "Mexico is an important trading partner for the US chicken industry and we hope that this case will be dropped as soon as possible. US-Mexican trade relations should be strengthened by encouraging trade to expand, not diminish."
