Economy

WTO against US poultry ban

By Lan Lan (China Daily)
Updated: 2010-06-17 07:17

BEIJING - China appears to have notched up a victory in a dispute against the United States over the latter's ban on poultry imports, according to an interim report by the World Trade Organization (WTO).

"We think the US will not try to impose a similar ban in the next fiscal year, since it would be regarded as open defiance of the latest WTO ruling," a Ministry of Commerce official, who declined to be named, told China Daily on Wednesday, adding that Beijing had received the WTO report.

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Another ministry official, Cheng Yongru, said China should take a firmer stance on import restrictions and technical barriers.

"Most of the actions China has taken involve anti-dumping and countervailing cases. It should get tougher on import restrictions and technical barriers to trade," Cheng, a division director of the bureau of fair trade for imports and exports, told China Daily.

The WTO interim ruling said the US import ban on China's poultry violates Sanitary and Phytosanitary Measures, or the SPS Agreement - which spells out how governments can apply food safety and animal and plant health measures - as well as most-favored-nation (MFN) treatment and general elimination of quantitative restrictions under the WTO legal framework.

The US move is not in line with the principles of the MFN treatment since the ban only targeted China, according to Zhang Liying, a professor of international law at China University of Political Science and Law.

The majority of the WTO panel of experts handling the dispute ruled in favor of China, according to a report by the China News Service.

The US can appeal against the decision, according to WTO rules, but the report will be considered the panel's final verdict if the US loses the appeal.

In April 2009, China filed an appeal with the WTO to protest a key clause in a US law, which prohibits Chinese exports of poultry.

China argued that section 727 of the Omnibus Appropriations Act of 2009, which was signed into US law in March 2009, violates the rules of the world trade body.

According to the US law, no government funds should be made available for establishment or implementation of a rule allowing imports of poultry products from China - deemed a de facto ban on Chinese poultry products.

The US government has revised the law annually for several years, said Zhang.

"Actually, the 2009 law we complained about has already ceased to be in effect, and it's not clear if the ruling will have a binding effect on its successor, section 743 in Act 2010," Zhang said.

The latest WTO report will force the US to comply with free trade rules and restrict its discriminatory actions against China, which is highly significant given the growing number of trade disputes between the world's two major traders, she said.

"It's good news for China anyway; it will bolster our confidence in the multilateral trading system," said Cheng, the ministry official.