News
07.09.2009
Farm exporters fear China backlash in tires case
Tyson Foods Inc, the world's largest meat company, and global grain titan Louis Dreyfus Commodities warned on Thursday that China could cut back on imports of US farm goods if President Barack Obama restricts US imports of Chinese tires. The companies, part of a coalition of more than 30 major farm and agricultural trade groups, urged the government to carefully weigh the consequences of its decision on a request by the United Steelworkers union to curb imports of Chinese tires.
The safeguard could prompt retaliation on products like pork and soybeans that would hurt US farmers when exports already have been slashed by the global recession, hurting prices and farm income, they said. "For some, the Chinese market is the difference between profitability and possible bankruptcy," the groups said in a letter to Ron Kirk, the US trade representative.
Kirk presented recommendations on the case to Obama on Wednesday. Under US trade law, Obama is required to announce a decision within 15 days. The case is being closely watched as a test of Obama's approach to trade in the face of conflicting pressures to protect jobs and promote free trade. China is a top market for US farm products like poultry, pork and soybeans.
The coalition also includes Hormel Foods Corp as well as processor and exporter associations, and soybean, corn, wheat, rice, poultry, cattle and pork producers. Retaliation by China "arguably would be inconsistent" with the country's World Trade Organisation commitments, the groups said.
"We have seen in other situations that China has demonstrated both the capability and the inclination to implement measures to restrict imports outside the normal WTO process," the groups said. Recently,China has made it more difficult for US poultry exporters to ship their products, which many blame on a US ban on imports of Chinese poultry products. China has also launched a WTO dispute about the ban. Earlier this week, smaller farm groups, including the National Cotton Council and National Farmers Union, urged Obama to restrict imports as part of a coalition with steel and labour groups.
Reuters
