TWN Info Service on WTO and Trade Issues (Aug09/10)
7 August 2009
Third World Network

Panel set over US measures on Chinese poultry
Published in SUNS #6754 dated 3 August 2009

Geneva, 31 Jul (Kanaga Raja) -- The WTO Dispute Settlement Body on Friday agreed to establish a panel, at the request of China, to rule on certain measures imposed by the United States affecting imports of poultry from China.

This was a second-time request and panel establishment was automatic.

The EC, Korea, Guatemala and Turkey reserved their third-party rights to the dispute.

In its communication to the DSB, China challenged certain related measures that prevent the importation of poultry products from China into the United States.

First, said China, various US laws, including, e. g., Section 727 of Division A of the Omnibus Appropriations Act of 2009 (signed into law as Public Law 111-8), as such, prohibit the expenditure of any US Government funds necessary to allow for the importation of poultry products from China.

Second, there is an ongoing US moratorium in the form of a suspension of: (a) the consideration of applications for the approval of, (b) granting of approval of, and ( c) implementation of approvals of, the import of poultry products from China.

This moratorium results in a ban on the import of poultry products into the US from China, said China.

According to the Chinese communication, Section 727 of the Omnibus Act currently prohibits the US Department of Agriculture (USDA) from taking action, including expending funds to: (1) establish or implement measures allowing for the importation from China of poultry products, including those that the USDA has already determined are eligible to be so imported under existing US measures; and (2) establish or implement measures expanding the scope of poultry products that may be imported from China.

The necessary consequence of Section 727 is to compel and sustain a prohibition on the ability of USDA to take those actions that are required by US law and regulations before the US can permit the importation of poultry products from China. This results in a ban on the import of poultry products from China into the US. "This is inconsistent with the United States' WTO obligations," said China.

In addition, since at least December 2007, the US has imposed a moratorium in the form of a suspension of: (a) consideration of applications for the approval of, (b) granting of approval of, and ( c) implementation of approvals of, the import of poultry products from China under the US system for regulating the import of poultry products.

This system includes the Poultry Products Inspection Act (PPIA), as amended, and the related regulations of the USDA's Food Safety and Inspection Service (FSIS Regulations).

According to China, the moratorium is also effectuated by the deliberate failure of the US to follow and implement the PPIA and the FSIS Regulations (e. g., for inspections, auditing, and evaluation) related to the eligibility of countries and entities to import poultry products, as applied to China. By contrast, the US follows and implements such laws, regulations, and procedures for other WTO Members.

China argued that the effect of this moratorium has been to ban the import of poultry products from China into the US. "The moratorium and resulting ban on the import of poultry products from China into the US are inconsistent with the United States' WTO obligations."

China requested that a panel be established pursuant to Article 6 of the Dispute Settlement Understanding; Article XXIII: 2 of the GATT 1994; Article 19 of the Agriculture Agreement; and Article 11 of the Sanitary and Phytosanitary Measures Agreement.

In its statement at the DSB, China said that the US has imposed measures that constitute clear violations of its WTO obligations, and result in a complete ban on the import of poultry products from China.

China added that although it has repeatedly expressed its serious concerns to the US, both bilaterally and multilaterally, unfortunately, this matter has not been solved so far. As a result, given its systemic and practical concerns, China said that it has no alternative but to renew its request for a panel.

Expressing disappointment over China's panel request, the US said that it did not agree with China's assertions that the measure at issue amounts to a discriminatory or protectionist measure.

The US maintained that nothing in the measure identified by China prevents the relevant US authorities from continuing to work together to reach an objective, science-based response to China's request for a declaration of equivalence with respect to poultry products.

The US said that these authorities are examining whether China's food safety system ensures that poultry products from China meet the US level of protection, and they are proceeding in a way that both safeguards human life and health and is consistent with US obligations under the WTO Agreement.

In addition, the US said that it does not agree with China's statement that this measure should forestall the normal business of trade between the US and China.

"The United States and China have a broad and deep trade relationship, and we continue to work together closely on a bilateral and multilateral basis to resolve any problems that may arise," said the US.

On occasion, both the US and China have had recourse to dispute settlement under the DSU, as the WTO Agreement contemplates, said the US, expressing confidence that the dispute can be resolved through the WTO dispute settlement system.

"Therefore, we see no reason that this or any other dispute should have repercussions on any other trade matters between the United States and China," said the US. +