WASHINGTON — The Office of the U.S. Trade Representative brought an unfair trade complaint against China on Tuesday for allegedly locking U.S. poultry exports out of the world's second-largest economy, the latest action in a widening gulf between the two trading partners.
"Let me be clear, the United States does not arbitrarily seek disagreements with China. Nor is it our desire to be disagreeable," Trade Representative Ron Kirk said, urging China to "live up to its commitments and play by the rules to which it has agreed."
Lawyers filed an official complaint to the World Trade Organization, seeking consultations within 30 days. If that fails to yield capitulation, then within 60 days the United States could seek a formal arbitration through a dispute-resolution panel.
The USTR alleged that Chinese policies threaten poultry processing jobs, of which there are 300,000 nationwide. Industry officials said that China has harmed poultry producers from Delaware to Texas and across the Southeast, including the Carolinas and the Gulf Coast.
The complaint comes on the heels of similar actions by the United States over the past year to protest alleged Chinese subsidies of green technologies, Chinese restrictions on U.S. credit card companies and U.S. exports of high-tech steels.
In a speech to businessmen in Beijing on Tuesday, the new U.S. ambassador to China, former Commerce Secretary Gary Locke, said bluntly that relations have soured.
"China's current business climate is causing growing frustrations among foreign business and government leaders, including my colleagues in Washington," Locke said.
The USTR action also comes at the start of a U.S. presidential campaign in which Barack Obama and the Republicans who want his job all vow a tough line with China for its trade and currency policies.
That explained Tuesday's rare show of bipartisanship, when in a statement the top two Republicans in the House of Representatives with jurisdiction on trade voiced support for the USTR action.
"I applaud Ambassador Kirk for taking this important step to enforce our trade rights in China. Reopening the Chinese market for U.S. chicken exporters has the potential to support thousands of good U.S. jobs," said Ways and Means Committee Chairman Dave Camp, R-Mich.
Texas Rep. Kevin Brady, chairman of that panel's trade subcommittee, added that "China's action to block U.S. chicken exports has gone on for years now, and I commend Ambassador Kirk for beginning a WTO dispute settlement action to resolve this long-running trade dispute."
The USTR alleged that unfair trade penalties levied by China on Sept. 26, 2010, have harmed U.S. poultry exporters Tyson Foods Inc., Pilgrim's Pride and Perdue. The penalties have effectively handed the U.S. market share to competitors such as Brazil and Thailand.
Kirk and his team said that about $1 billion in exports were affected, but statistics from the USA Poultry & Egg Export Council show the amount is under $700 million.
U.S. poultry exports to China in 2008 were valued at $676.7 million and $647.3 million in 2009. Export values dropped to $135.4 million in 2010 amid China's imposition of penalties. Through July this year, there were paltry poultry exports to China, valued at just $37.2 million.
The USTR's complaint centers on the methodology used by China to determine that U.S. exporters were selling at less than normal value.