The Chicken War: A Battle Guide

The long duel between the United States and the Common Market over chicken tariffs in 1963 had businessmen and government officials on both sides of the Atlantic alternating between lamentation and laughter. The very name given this duel—the chicken war—was ludicrous and the subject of endless jokes and puns. It was regarded with amusement as a petty squabble in a world of much graver problems. But the chicken war produced more anger than fun.

For United States poultry growers, the increased Common Market tariffs on table poultry meant the virtual elimination of their rich export market in West Germany and other European areas. For both Europeans and Americans hoping that liberal trade policies would emerge from tariff negotiations next spring, the war was an ominous portent.

The chicken war began in mid‐1962 when the six member nations of the Common Market—France, West Germany, Italy, Belgium, the Netherlands and Luxembourg—raised their common outer tariff on poultry to 13.43 cents a pound. In Germany, the biggest market for American chicken exports, the tariff had been 4.8 cents a pound.

The duty is a variable one, intended to serve as a barrier to chicken imports. West Europeans, particularly West Germans, were importing chicken in large quantities from the far more efficient American producers.

The tariff, in large part at least, was intended to encourage the development of German poultry growers and to contribute to the agricultural selfsufficiency of the European Economic Community.

The new tariff effectively wiped out the price advantage of American poultry raisers, and their exports began plummeting from the beginning of 1963. It is estimated that these exports will be down at least 66 per cent from the 271 million pounds shipped abroad last year.

There was wide disagreement on the dollar damage the new levies would inflict on United States exports. The Common Market said that the loss would amount to only $19 million. The United States Government declared that the loss was $46 million. Poultry exporters insisted their losses would be higher.

The American poultry industry, centered chiefly on the Atlantic seaboard, made vehement protests. The complaints reached receptive ears in Washington, for much more was at stake than the loss of chicken exports Administration officials feared that the chicken war was the first step in a general hightariff, protectionist agricultural policy for the European Economic Community.

The Common Market countries now purchase $1.25 billion in United States farm products a year, accounting for about one‐fourth of all agricultural exports. A sharp drop in these exports would severely aggravate the United States' unhealthy international payments position.

Even more significant, the chicken war raised the question whether the West would be able to proceed down the path to liberal trading policies and closer trading partnership that seemed so likely in 1962. Was the chicken war the first cloud in a new storm of protectionist activity? Many businessmen, American and European feared so.

In the early part of the year the United States called on the Common Market to modify its poultry levies. An offer by the market to reduce the tariff by 10 per cent was rejected as insufficient. The United States in turn threatened retaliatory tariffs for the full $46 million of its claimed loss. France and West German reacted angrily to the threat.

And there is where matters stood at midyear. A reduction of about 1 cent a pound in the tariff failed to solve the dispute. There was rising doubt that the chicken war could be contained.

Then, early in the autumn, the United States agreed to submit to arbitration by a panel of experts convened under the auspices of the General Agreement on Tariffs and Trade. This panel ruled that the losses incurred by the United States because of the Common Market levies amounted to $26 million.

Shortly after he assumed office, President Johnson announced increased tariffs on trucks, brandy, dextrine and potato starch amounting to just about$26 million. The new duties affected West German trucks, French cognac and Dutch potato products.

Thus, an armistice was reached in the chicken war. Both sides claimed the victory, the United States on the principle of retaliation and the Common Market on the low estimate of United States losses. Yet few people were really happy with the solution.

The question that remains is: Will the conflicting views that caused the chicken war clash in negotiations next May? The official position in America and Europe is one of guarded optimism. Private business circles, however, are not so sure.