U.S. Challenges China Over Chicken Amid Trade Friction

Closeup of a mature broiler chicken in a poultry house in Iowa. The Obama administration plans to file a trade complaint against China Tuesday over access to the Asian giant’s market for U.S. chicken ENLARGE
Closeup of a mature broiler chicken in a poultry house in Iowa. The Obama administration plans to file a trade complaint against China Tuesday over access to the Asian giant’s market for U.S. chicken Photo: Zuma Press

The Obama administration plans to file a trade complaint against China Tuesday over access to the Asian giant’s market for U.S. chicken, the latest friction point in an election year that is casting a harsh light on U.S. economic ties with China.

The Obama administration will demand China open its market to American chicken or face potential trade sanctions, according to people familiar with the matter. The latest filing with the World Trade Organization will accuse China of not removing chicken tariffs deemed improper by the Geneva-based trade body, according to three people with knowledge of the trade case.

The skirmish over chicken exports comes as the Obama administration steps up enforcement of trade rules against Beijing and other countries in hopes to winning more congressional support for its signature Pacific trade agreement. The administration has brought 20 cases since 2009 at the WTO, 11 of them targeting Beijing’s practices.

Some U.S. efforts appear to be gaining traction. Last month, Washington said China had ended an incentive program that effectively subsidized exports from small firms, a year after a WTO challenge.

U.S. officials have threatened Beijing with unspecified trade measures if it doesn’t agree to reduce steel production.

The 2016 campaign season has sharpened the rhetoric on trade and raised pressure on U.S. officials and politicians. Donald Trump, the presumptive GOP presidential nominee, has repeatedly bashed previous trade deals and threatened Beijing with across-the-board tariffs. He and his likely Democratic rival, Hillary Clinton, have rejected the proposed Pacific trade pact in its current form, and the trade agreement appears unlikely to gather sufficient support in Congress soon.

President Barack Obama and his advisers have backed strict adherence to a rules-based trading system as a way of encouraging China and other major emerging markets to play ball in international commerce. But critics of the administration’s trade policy say WTO cases can result in a remedy that’s too small or too late for American companies, and some including Mr. Trump have called for imposing immediate, unilateral barriers or tariffs to solve disputes. The U.S. imported $ 482 billion in Chinese goods last year, compared with $ 116 billion in U.S. exports.

The chicken compliance proceedings are the latest in a six-year battle over Beijing’s duties on so-called broiler products. In 2013, U.S. officials announced they had defeated China in a WTO case over the U.S. chicken duties, which were meant to punish American poultry producers for allegedly selling products below fair value with the help of subsidies.

But China has retained significant tariffs on chicken, effectively shutting U.S. producers out of what was one of their biggest overseas markets. In 2015 China imported just 2% of its domestic consumption, or 268,000 metric tons of broiler meat, according to the U.S. Department of Agriculture.

The latest proceeding could end in China paying compensation or in unrelated trade sanctions against Beijing, according to people familiar with the matter.

A spokesman for China’s embassy in Washington didn’t immediately reply to a request for comment on the case.

Write to William Mauldin at [email protected]


WSJ.com: US Business

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