Behind the scenes negotiations to settle a poultry anti-dumping case filed by Mexican producers against their U.S. counterparts have collapsed, leaving the trade dispute in the hands of Mexican government officials.
It is unclear what triggered the end of the bilateral talks.
Last year, Mexico’s largest poultry producers filed an anti-dumping complaint against U.S. chicken leg quarters, alleging they were being dumped in Mexico at prices lower than they were sold in the U.S.
A Mexican government agency in August made a preliminary finding in their favor and ruled U.S. chicken meat should be subject to an import duty of 129.5 percent. Although it had the power to do so, the Mexican government did not immediately apply the tariff.
Representatives of the U.S. poultry industry spent months trying to negotiate an import quota level with its biggest customer that would allow it to avoid the expense of the trade litigation while retaining access to much of the market.
Such a quota does place a ceiling on future growth of U.S. poultry sales in Mexico, but it would allow the trade to continue uninterrupted. In addition to the cost of putting on a legal defense in a trade case, the industry also stands to lose market share if a high duty is imposed.
“This system isn’t universally loved, but it is effective,” the industry representative said. “We have that system in place as part of the CAFTA (Central America Free Trade Agreement), and it has worked well.”
After the talks broke off, a bipartisan group of 16 senators wrote to U.S. Trade Representative Ron Kirk, urging the U.S. government to intercede and protect the U.S. poultry industry.