GIPSA Rule Also Could Benefit Brazil

Elam also said the proposed GIPSA marketing regulations would erode the competitive position of U.S. broiler chickens and could lead to a substantial loss of U.S. chicken exports. Export competitors such as Brazil could reap significant benefits from the proposed rules, Elam's study claims, due to the higher costs of production that would ensue.

Elam also said the proposed GIPSA marketing regulations would erode the competitive position of U.S. broiler chickens and could lead to a substantial loss of U.S. chicken exports. Export competitors such as Brazil could reap significant benefits from the proposed rules, Elam's study claims, due to the higher costs of production that would ensue. 

Elam likened the potential damage from unilateral U.S. regulatory action to the record of the European chicken market following the European Union's unilateral abolition of sub-therapeutic antibiotics used in chicken production in 1999. 

EU chicken exports had been increasing in the late 1990s but the higher production costs imposed by the ban led to a significant loss of trade competitiveness, Elam said. "That, in turn, contributed to a sharp 1.1-1.3 billion pound (499,000-589,700 tonne) decline in annual EU chicken net exports," he pointed out, "and by 2007 the EU imported more chicken than it exported." 

U.S. chicken exports increased by about 2 billion pounds per year after 1999, partly as a result of the EU's lost competitive advantage, the paper asserts. If U.S. export volume declined to the same extent as the EU's in the decade following 1999, the financial loss to the U.S. chicken industry would be about $495 million, it adds.

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