Chicken War between the US and EEC (1962-1964)

In 1958 theTreaties of Rome establishing European Economic Community (EEC) and EURATOM entered into force. The treaty establishing the EECor Common Market was aimed at the gradual elimination of all industrial tariffs on trade among the members, the alignment of industrialtariffs imposed on imports from the third world countries, and the adoption of a Common agricultural policy (CAP) - all to be completed inaccordance with a predetermined schedule over a period of twelve years. The movement towards CAP was an indispensable element of thecreation of the economic union of the Six. On the other hand, the danger existed that the common policy would be implemented in a highlyprotectionist manner which would endanger many of American agricultural exports to Europe. The «Chicken War» of 1962-1964 was oneof the first trade conflicts occurred between the US and EEC. It was caused by shaping of the Common agricultural policy of the EEC andadoption of new duties on poultry and other items. As a result of that the duties on poultry went up and American export to West Germany(the main customer) was 3 times reduced. The Chicken War epitomized the mounting concerns of American farmers and policymakersabout the consequences of the CAP. Many Americans saw it as a sort of test case of EEC intensions. The powerful American poultry industryimmediately began pressing the American government to protect its interests. American farmers from the South states - the main producersof poultry - demanded that the Six maintain Americas share in the West German Market and criticized the Administration for insufficientprotection of American trade interests. While the United States had initially claimed that $46 million of its trade was affected by thepoultry levies, the Commission of the EEC calculated that trade damage to the United States would amount to no more than $19 million. Tosolve the problem conflicting parties addressed to GATT. The GATT expert panel settled for a compromise by estimating damage to theUnited States of $26 million and permitting the United States to retaliate on four products for a similar amount. In January 1964 L. JohnsonAdministration raised tariffs on items that particularly injured West Germany, France, and the Netherlands, the main protectionists. Althoughthat decision was criticized by American press as only temporary solution of economic tensions between conflicting parties, untilnow the most US-European Union trade conflicts are being regulated by this way.

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