TWN Info Service on WTO and Trade Issues (Aug09/03)
3 August 2009
Third World Network

US blocks panel request in China poultry dispute
Published in SUNS #6746 dated 22 July 2009

Geneva, 21 Jul (Kanaga Raja) -- A request by China for the establishment of a dispute panel over certain measures imposed by the United States affecting imports of poultry from China was blocked by the United States at a meeting of the WTO Dispute Settlement Body (DSB) on Monday.

This is a first-time request and panel establishment would be automatic when a second request by China comes up before the DSB.

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 on Monday, China said that the US measure, while violating various WTO rules, has severely undermined the stable development of Sino-US trade on poultry products, and damaged the lawful rights and interests of China's poultry industry.

"This constitutes a typical discriminatory protectionism measure in international trade," said China.

Noting that the US, since at least 2007, has closed the door to China's poultry products through a number of annual omnibus appropriation acts and a series of related measures, China pointed out that the US Congress is currently in the process of formulating a new agriculture appropriation act, and certain Congress members are still insisting on inserting new discriminatory provisions to restrict imports of poultry products from China.

China voiced grave concerns over those activities which it said will further forestall the normal business of Sino-US trade.

In its statement, the US said that it places great importance on ensuring that its measures relating to food safety are based on science and in compliance with its obligations under the WTO Agreement.

Consistently with the SPS Agreement, the US said, it permits imports of poultry products from all countries for which a determination of equivalence has been made. In this dispute, China challenges the way in which the US is responding to China's request for a determination of equivalence.

In this regard, said the US, the relevant US authorities are working together to ensure that the US response to China's request for a determination of equivalence is based on an objective, science-based consideration of all the relevant evidence in a way that is fully consistent with the obligations in the covered agreements.

The US further argued that nothing in the measure identified by China prevents these US authorities from continuing to work together to reach an objective, science-based response to China's equivalence request that both safeguards human life and health with respect to poultry products in the US.

The US also noted that the measure identified by China, will, by its terms, expire at the end of the current US fiscal year on 30 September 2009. An open, public debate is under way in the US Congress as to what conditions, if any, should be attached to the use of appropriated funds in the next fiscal year with respect to the import of poultry products from China.

In other actions, Korea blocked a panel request by Canada concerning measures imposed by Korea affecting the importation of bovine meat and meat products from Canada.

This is a first-time request and panel establishment would be automatic when a second request by Canada comes up before the DSB. +