Thread: Protectionism

China to impose duties on US chicken

By Geoff Dyer in Beijing

Published: February 5 2010 04:28 | Last updated: February 5 2010 10:28

China will impose anti-dumping duties of up to 105.4 per cent on imports of poultry products from the US, opening a new rift between the two countries at the end of a week in which frictions between the US and China have escalated considerably.

China’s Commerce Ministry said on Friday it had decided to impose the heavy duties after an investigation into allegations of dumping made by local poultry producers. In recent years, American companies had developed a profitable business exporting to China chicken feet that were almost worthless in the US.

The new trade dispute came as it appeared likely President Barack Obama would meet with the Dalai Lama later this month.

The White House has yet to confirm the date for any meeting but the Tibetan religious leader’s office said that he would be in Washington DC on February 17-18.

Earlier in the week, a senior Chinese official said that a meeting with the Dalai Lama was not in the interests of the US at a time when it was trying to recover from the financial crisis.

”If the US leader chooses this period to meet the Dalai Lama, that would damage trust and cooperation between our two countries, and how would that help the United States surmount the current economic crisis?” said Zhu Weiqun, a vice minister at the Communist Party’s United Front Work Department, the body which handles Beijing’s contacts with the Dalai Lama.

China also this week threatened to impose sanctions on four US companies for participating in a planned $6.4bn arms deal with Taiwan that the Obama administration has approved. The companies included Boeing, which has been at the centre of US-China relations for the last 30 years.

Meanwhile, Mr Obama appeared to step up the pressure on China over its currency on Wednesday when he told Senate Democrats that the issue of currency rates needed to be addressed internationally ”to make sure our goods are not artificially inflated in price and their goods are artificially deflated in price”.

In a statement on its website, China’s Commerce Ministry said that US poultry importers had caused “material damage” to local companies. Chicken feet and wings sell for around 2 cents per pound in the US, however they can fetch twenty times that amount in China where feet in particular are considered a delicacy. Chinese producers alleged, however, that the amount US companies were charging only just covered freight costs. The duties, which will begin on February 12, range from 43.1 per cent to 105.4 per cent.

The tariffs came a day after China requested a World Trade Organisation investigation into European Union duties on imports of shoes from China.

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FT.com / China - China to impose duties on US chicken

China takes EU shoe complaint to WTO
FT.com / China - China takes EU shoe complaint to WTO
By Jamil Anderlini in Beijing and Joshua Chaffin in Brussels

Published: February 4 2010 11:05 | Last updated: February 4 2010 16:08

China filed a World Trade Organisation complaint against the European Union on Thursday over its treatment of imported footwear, escalating a long-running dispute between the trading partners.

The move follows the EU’s decision in December to extend anti-dumping duties against Chinese and Vietnamese footwear for 15 months. It comes at a time of rising tension between China and its western trading partners – a situation that has been exacerbated by the economic recession.

China’s ministry of commerce said the EU tariffs “damage the legitimate rights and interests of Chinese enterprises”.

The duties amount to 16.5 per cent for Chinese imports and 10 per cent for Vietnamese. They were originally rejected by EU member states in a non-binding vote in November. But Germany, Austria and Malta later changed their positions amid heavy lobbying by the Commission.

Many European retailers and global shoe brands, which source numerous products from China, also opposed the opposed the move.

In what was seen as retaliation, China quickly slapped duties on imported carbon-steel fasteners from Europe.

In its filing, China is requesting consultations with the EU to try to resolve the matter. If the two sides cannot agree a settlement within 60 days, then China would request a ruling from the WTO.

It is only the second time Beijing has taken the EU to the WTO’s formal dispute resolution process and comes as Beijing is becoming more assertive on the world stage on issues ranging from climate change to US arms sales to Taiwan.

The European Commission said on Thursday that it had “taken note” of China’s action, and that it had “scrupulously followed” WTO rules in reaching its decision.

The complaint comes at an awkward moment for Brussels, with the new trade commissioner, Belgium’s Karel De Gucht, recently appointed but not yet confirmed by the parliament. That is expected to occur next week.

During a confirmation hearing last month, Mr De Gucht pledged to apply anti-dumping measures based on rules – not politics – and to deepen the dialogue with China, which has quickly become one of the EU’s largest but most contentious trading relationships.

The row has emerged as a closely watched test of the EU’s commitment to free trade in the middle of an economic recession. It has pitted small shoemakers in Italy and Spain against large retailers from the UK and elsewhere that have increasingly outsourced production to Asia.

The EU first imposed the duties for two years in 2006 after a surge of low-cost imports eroded the market share of domestic footwear manufacturers. European market share has since stabilised.

Lord Mandelson, who imposed the original duties in his previous role as European trade commissioner, lobbied heavily against their renewal. Lord Mandelson, the UK business secretary, warned that such a move could damage trade relations with China and Vietnam.

In a statement on Thursday, the European Footwear Alliance, whose hundreds of members includes retailer Adidas and Clarks, said it shared China’s view that the EU decision had been based on “a very questionable investigation and a flawed analysis”.

“The extension of the footwear duties opens the door to retaliatory measures on EU exports to China and puts paid to European leaders’ repeated pledges to defend free trade,” the group added. “The EFA calls on the European Commission to take immediate action to prevent relations between the EU and China from degenerating further.”

Concerns over the potential for a trade war involving China and the west have been growing in the aftermath of the financial crisis.

Beijing has refused to allow its currency to appreciate since the onset of the crisis despite complaints from many of its trading partners that it is pursuing a mercantilist policy that puts other countries at a disadvantage.

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