August 4, 2009

While the World Trade Organisation (WTO) is handling the China-US poultry dispute, China's new import rules aimed at curbing poultry smuggling could result in a sharp decline of shipments from the US.

 

China will require notification of all new poultry shipments directly from the US Department of Agriculture, instead of allowing exporters to submit USDA certificates themselves, quarantine authorities said late last week.

 

With this new rule, it will be harder for smugglers in Hong Kong to present fake USDA certificates for imports from third countries of wing tips and chicken feet, which are considered as delicacies in China.

 

However, it could also delay legitimate shipments as the US government works out a system to forward the certification, according to the US poultry industry.

 

The new regulations came at a time as China, frustrated over the lack of progress for its bid to export cooked chicken to the US, brought its case to a WTO dispute panel.

 

Meanwhile, the US poultry industry is afraid of losing a lucrative market for wing tips and chicken feet, which are basically worthless in the US markets. It supports the Chinese processors' efforts to enter the US market, where cooked chicken and chicken breasts fetch much higher prices than in China.

 

Nevertheless, in an emailed statement on Monday (Aug 3), the American Chamber of Commerce in China said it "firmly supports the use of the WTO dispute settlement process when bilateral negotiations fail to yield results in cases of trade disagreement". It added that regardless of the outcome of the current dispute, the WTO process is the most appropriate and transparent way to resolve trade issues without causing broader damage to China-US economic relationship.

 

The US poultry industry has warned that China is already unofficially blocking US imports such as informing importers of a sharp decrease in import quota allocations in early July.

 

However, the actual trading situation did not seem to be deeply affected in July, industry officials said on Monday.

 

According to official Chinese data provided by the USA Poultry and Egg Export Council, the US accounted for 89 percent, or 310,112 tonnes, of Chinese poultry imports in the first half of 2009, which may not accurately reflect smuggled meat. China's imports of chicken from the US rose 7.7 percent in the first half of the year, while chicken feet imports rose eight percent.