Today, in a letter to U.S. Trade Representative Ron Kirk, Sens. Tom Carper (D-Del.) and Saxby Chambliss (R-Ga.) led a bipartisan group of 16 senators in requesting an end to Mexico's recent antidumping charge against U.S. poultry. This action threatens the market access provided to U.S. poultry under the North American Free Trade Agreement (NAFTA).
In the letter, Senators urge U.S. Trade Representative Kirk to resolve the anti-dumping case brought by Mexico against U.S. poultry products. The charge is based on the "average cost of production," and uses a flawed assumption that every part of the chicken should be priced the same. For example, under this assumption, premium parts of such as the chicken breast would be valued at the same price as the chicken feet.
"This assumption is flawed and concerns us as members from poultry producing states," wrote the Senators. "With U.S. poultry exports to China significantly decreased due to frivolous antidumping duties, Mexico is our most important market. Should this case lead to a formal consultation, the U.S. poultry industry will suffer a huge loss due to the historically lengthy legal process employed by the World Trade Organization."
Every year, Mexico imports nearly 250,000 metric tons of U.S. poultry products, which in the most recent year was valued at nearly $270 million. If Mexico imposes these duties, they could range from 64 percent to 129 percent. Recently, Mexico announced its interest in joining the Trans-Pacific Partnership negotiations. While Mexican membership in the Trans-Pacific Partnership negotiations is a positive step, it is critical to ensure that Mexico honors its previous agreements under NAFTA and lives up to the market access provided for U.S. poultry before expanding its commitments to regional trade alliances.
Other signers include Sens. Mark Pryor (D-Ark.), Chris Coons (D-Del.), Barbara Mikulski (D-Md.), Johnny Isakson (R-Ga.), Ben Cardin (D-Md.), Thad Cochran (R-Miss.), Roger Wicker (R-Miss.), Kay Hagan (D-N.C.), Roy Blunt (R-Mo.), Richard Lugar (R-Ind.), John Boozman (R-Ark.), Robert Casey (D-Pa.), Jeff Sessions (R-Ala.) and Daniel Coats (R-Ind.).
A copy of the letter follows:
April 2, 2012
The Honorable Ron Kirk
United States Trade Representative
600 17th Street, NW
Washington, D.C. 20508
Dear Ambassador Kirk:
We are writing to express our concern with the antidumping action Mexico has instituted against chicken leg quarters. This action is based on the "average cost of production" and assumes that every part of the chicken should be priced the same, e.g., 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.
The Mexican ministry recently announced its preliminary results; with proposed duties on U.S. 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.
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 U.S. poultry exports to China significantly decreased due to frivolous antidumping duties, Mexico is our most important market, importing nearly 250,000 metric tons in the most recent year valued at nearly $270 million. Should this case lead to a formal consultation, the U.S. poultry industry will suffer a huge loss due to the historically lengthy legal process employed by the World Trade Organization.
We appreciate your efforts in working to open markets for U.S. poultry. As we continue the Trans-Pacific Partnership negotiations, we urge you to resolve this situation and ensure that Mexico honors its commitment under NAFTA. We hope the antidumping case by Mexico is terminated and look forward to working with you to resolve this matter.