cato-logoAntidumping Fowls Out: U.S.–South Africa Chicken Dispute Highlights the Need for Global Reform

CATO Institute – October 19, 2015

The United States and South Africa recently resolved a long-standing dispute over trade in chicken. Fifteen years ago, South African authorities, in response to domestic industry claims that American poultry farmers were “dumping” chicken meat in South Africa by selling at unfairly low prices, imposed antidumping tariffs on chicken from the United States. These duties were so high that American producers were locked out of the market entirely. The U.S. government has long claimed that those duties were improperly calculated.

An agreement reached in June 2015 has now settled the dispute by establishing an import quota that enables U.S. producers to sell a set amount of chicken in South Africa without paying the antidumping duties. This sort of managed trade may be better than no trade, but the market is sure to remain politicized and inadequately competitive.

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cato-logoCountervailing Calamity: How to Stop the Global Subsidies Race

CATO Institute – October 9, 2012

The world is awash in trade-distorting subsidies. Since the financial crisis of 2008, governments have adopted massive “stimulus” packages that have included taxpayer subsidies for industries, such as agriculture, alternative energy, and automobiles, which have distorted global markets, bred cronyism, and undermined free trade. These policies encouraged copycat subsidization, which spawned an increase in litigation at the World Trade Organization and led to the frequent imposition of protectionist duties via national countervailing duty (CVD) laws.

Trade reform is badly needed. Unfortunately, the U.S. government has little credibility on this issue: it is one of the world’s largest subsidizers, funneling billions of dollars annually to chosen industries, causing economic uncertainty, and creating breeding grounds for corruption. Yet, ironically, with 59 currently active or pending CVD measures affecting over $11 billion of imports, the U.S. government is also one of the most frequent users of anti-subsidy disciplines.

 To read the full report, please click here.