The US industry greatly appreciates the determination that Ambassador Kirk and his staff have shown to address this significant trade problem. The action being brought is a trade remedy case that challenges the method by which China determined that the product was allegedly sold as less than normal value.

The China case used 'average cost of production' to determine normal value rather than using domestic US market prices for comparable sales as is customary in anti-dumping actions. The use of 'average cost of production' reflects neither market realities nor the way in which companies in the industry commonly keep their accounts.

The US industry agrees that the Chinese methodology was seriously flawed and that the anti-dumping proceeding did not comply with international rules. The Chinese authorities also found that US poultry exports benefit from farm subsidies, such as support prices for corn and soybeans. The reality is that US poultry receives no government subsidies and does not benefit from any of the government crop programmes.

The US industry considers it unfortunate that this dispute has to be addressed through the formal WTO process but believes that it is necessary that this incorrect methodology be challenged and that US trading rights guaranteed by WTO agreements be protected. This action is essential to demonstrate to the international community that anti-dumping measures based on average cost of production is a form of unfair protectionism that is inconsistent with multilateral trade rules. The US industry also believes that this case will have direct implications for dumping cases that have previously been brought by other WTO Member countries that are also incorrectly based on an average cost of production methodology.

The US industry has been cooperating with the Chinese industry and the Chinese government on other initiatives to improve conditions of two-way poultry trade that are unrelated to the issues being addressed in the case initiated today. The industry's commitment to those initiatives will continue and not be affected by the initiation of the WTO case. The US industry will continue to work in the future with its Chinese industry counterparts and the Chinese government to resolve any trade irritants that may occur in an amicable fashion, and is hopeful that future problems can be addressed without resort to formal dispute settlement.

The US industry is hopeful that the case will proceed on an expeditious schedule, and that there will be a timely and satisfactory resolution that enforces US rights under the WTO.