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Home > Top Story Archive > July 2, 2009

Top Story

The following story is from the July 2 issue of International Trade Reporter
Current Reports:

Agriculture

China to Seek WTO Panel Ruling
On U.S. Poultry Import Restrictions

GENEVA—China will request the establishment of a World Trade Organization dispute panel to rule whether provisions in a U.S. government spending bill aimed at maintaining a ban on poultry imports from China are in violation of global trade rules.

The request, filed late June 23, came on the same day the United States and the European Union initiated WTO dispute proceedings against China's export restrictions on raw materials and is likely to ratchet up trade tensions between Beijing and Washington (26 ITR, 838, 6/25/09).

The request will be inscribed on the next meeting of the WTO's Dispute Settlement Body scheduled for July 20. The United States can block the request at that meeting.

A Chinese official said that if the request is blocked, China will ask for a special DSB meeting on July 31 to make a second request for the panel. Under WTO rules, a second request for a panel can only be blocked in the DSB if it rejected by all members in attendance.

At issue is Section 727 of the Omnibus Appropriations Act of 2009. Section 727 prohibits the U.S. Department of Agriculture from taking action, including expending funds, to: (1) establish or implement measures allowing for the importation from China of poultry products that the USDA has already determined are eligible to be so imported under existing U.S. measures, and (2) establish or implement measures expanding the scope of poultry products that may be imported from China (26 ITR 328, 3/5/09), (26 ITR 381, 3/19/09).

China argues that by precluding the use of funds to enable imports from China of poultry products, the United States is imposing quantitative restrictions in violation of Article XI:1 of the WTO's General Agreement on Tariffs and Trade (GATT) and Article 4.2 of the WTO's Agriculture Agreement. In addition, by imposing these restrictions with respect to imports from China only, the United States is failing to accord to China an advantage, favor, privilege or immunity granted to other WTO members with respect to rules and formalities on imports as required under Article I:1 of GATT.

Not Based on Science

China argues that the measures cannot be considered a sanitary and phytosanitary (SPS) measure under WTO rules and, even if considered so, is not based on a proper risk assessment and is not supported by sufficient scientific evidence as required under WTO rules.

Beijing asked for WTO consultations with the United States April 17 to discuss its complaint, but the talks failed to produce an agreement (26 ITR 543, 4/23/09).

China has received support from the U.S. National Chicken Council (NCC), which described China's complaint last April as “appropriate.”

“China should be held to the same food safety standards as every other nation, and Congress should not stop USDA from doing its job of deciding which countries meet U.S. standards to export poultry products to this country,“ the NCC declared.

By Daniel Pruzin

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