WTO - "DSB establishes panel in China-US poultry case"

by M. Ulric Killion

China launched the first World Trade Organization case against the administration of President Barack Obama on Friday, challenging a U.S. ban on Chinese poultry. Beijing said Washington was violating a number of global commerce rules by preventing Chinese chicken parts from entering the U.S. market. Its request for consultation kicks off a 60-day consultation period, after which it can ask the WTO to launch a formal investigation. The WTO can authorize sanctions against countries failing to comply with trade rules, usually after years of litigation; Source: PoultryMed, 2009-China challenges U.S. ban on its poultry, April 18, 2009.

As a follow up to an earlier blog (Killion, China request WTO panel on US imports of poultry, July 27, 2009), according to the WTO, "At a meeting of the Dispute Settlement Body (DSB) on 31 July 2009, a panel was established regarding US measures that, according to China, affect imports of Chinese poultry" (WTO: 2009 News Items, 31 July 2009 Dispute Settlement, DSB establishes panel in China-US poultry case).

At the heart of the controversy between China and the United States is US legislation that precludes "the use of any of the funds appropriated under legislation for FY 2010 for establishing or implementing a rule allowing mainland China poultry products to be imported into the United States" (Killion, 2009).

China's perspective on the problematic US legislation follows: "China said that on 11 March 2009, the US President had signed the US Omnibus Appropriation Act of 2009 into law. China pointed out that Section 727 of the Act states that 'none of the funds made available in this Act may be used to establish or implement a rule allowing poultry products to be imported into the United States from China.' This resulted in a complete ban on the import of poultry products from China into the US, China said, thus violating various WTO rules" (WTO: 2009 News Items, 20 July 2009, Dispute Settlement, China, Canada request panels).

Finally, the WTO DSB, as earlier mentioned, did eventually establish a panel, and the WTO's public announcement of the establishment of a panel follows.

WTO: 2009 New Items

31 July 2009

Dispute Settlement DSB establishes panel in China-US poultry cases

At a meeting of the Dispute Settlement Body (DSB) on 31 July 2009, a panel was established regarding US measures that according to China, affects imports of Chinese poultry.

Panel establishment


DS392: United States — Certain measures affecting imports of poultry from China The panel was established of the basis of China's second request for a panel (WT/DS392/2). Under the rules of the WTO's Dispute Settlement Understanding, the establishment of a panel is automatically approved by the DSB in response to a second request for a panel by a Member. In its request, China noted that on 11 March 2009, the US President signed the US Omnibus Appropriation Act of 2009 into law. China pointed out that Section 727 of the Act states that "none of the funds made available in this Act may be used to establish or implement a rule allowing poultry products to be imported into the United States from the People's Republic of China".

China said that the matter had not been solved during consultations with the United States, and therefore renewed its request for a panel, which was first presented at the 20 July 2009 DSB meeting.

The US expressed disappointment with China's decision to pursue its request for a panel. The US said that it does not agree with China's claims that the measures in question are discriminatory or protectionist. It said that nothing in the measures identified by China prevents the relevant U.S. authorities from working to reach an objective, science-based response to China's request for a declaration of equivalence with respect to poultry, and such authorities are continuing to do so. The US also noted certain technical deficiencies in the Chinese request.

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

Copyright © Protected - All Rights Reserved by M. Ulric Killion, 2009.