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U.S. congressmen weigh in on Mexico's poultry antidumping proposal
Story Date: 6/5/2012
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Source: Michael Fielding, MEATINGPLACE, 6/5/12
In the wake of Mexico’s proposal to impose duties of 64-129 percent on U.S. chicken leg quarters, 49 congressmen have sent a letter to U.S. Trade Representative Ron Kirk to voice their concerns about the impact on the U.S. poultry industry.
A study released in May found that retail chicken prices in Mexico would rise by 22.4 percent, the meat Consumer Price Index (CPI) would jump 7.2 percent and the food CPI by 1.9 percent, should the Mexican government implement duties on U.S. chicken leg quarter imports.
In the letter, the congressmen argue that Mexico’s calculation to determine if U.S. products have been dumped is flawed and unacceptable to the World Trade Orgnization (WTO).
“This assumption is flawed, discriminates against U.S. producers, and concerns us as members from poultry producing districts,” according to the letter. “U.S. companies submitted their costs of production information using a value-based cost accounting method–a method well established and recognized by the poultry industry worldwide as a reasonable basis to calculate costs.”
The letter points out that value-based cost accounting is used by both the United States and Mexico and is consistent with Mexican financial reporting standards. “Given those facts, under the WTO Antidumping Agreement, Mexico may not disregard the costs of production reported in this case and use average costs instead,” according to the letter.
Early in 2011, three Mexican poultry companies petitioned the Mexican government to begin an antidumping investigation of imports of chicken leg quarters from the United States, alleging that U.S. companies were exporting leg quarters to Mexico at below-market prices. The Mexican ministry announced its preliminary results with proposed duties on U.S. poultry ranging from 64 percent to 129 percent.
“As the Trans-Pacific Partnership negotiations continue, we urge you to resolve this situation as promptly as possible and ensure that Mexico honors its commitments under NAFTA and the WTO,” according to the letter.
Mexico is the largest customer of U.S. poultry exports, a market valued at more than $275 million.
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