Poultry Dispute with China Enters New Phase

Poultry Dispute with China Enters New Phase

The government of China has requested consultations in the World Trade Organization (WTO) over Section 727 of the 2009 Omnibus Appropriations Act, recently passed by the U.S. Congress, which prohibits USDA funding from being used to advance a risk assessment on imports of China's cooked poultry.

“China’s decision to take this issue to the WTO is a significant development and may have implications for several outstanding red meat access issues,” said Joel Haggard, USMEF senior vice president for the Asia Pacific region.

While China/Hong Kong was the second-largest market for U.S. pork in 2008, pork exports to the region have declined in recent months due to China’s efforts to bolster its domestic pork production. China is currently closed to U.S. beef exports because the United States and China have been unable to agree upon an acceptable trade protocol.

China’s request for consultations is the first step in the WTO dispute settlement process. If consultations do not produce a resolution, China has the option of pursuing the case through the entire process – an approach that could take up to two years to produce a final result.  

Representatives from China’s Ministry of Commerce have been quoted as saying that Section 727 is a discriminatory and protectionist action and is not in line with the principles of Most Favored Nation treatment. Delegates representing China's poultry industry had threatened retaliatory action - including filing a WTO case - during the National People's Congress (NPC) in mid-March when President Obama signed the appropriations bill. China’s Ministry of Commerce has also stated its intention to take its case directly to U.S. lawmakers later this month during a state-sponsored buying mission to the United States.

Poultry Dispute with China Enters New Phase

The government of China has requested consultations in the World Trade Organization (WTO) over Section 727 of the 2009 Omnibus Appropriations Act, recently passed by the U.S. Congress, which prohibits USDA funding from being used to advance a risk assessment on imports of China's cooked poultry.

“China’s decision to take this issue to the WTO is a significant development and may have implications for several outstanding red meat access issues,” said Joel Haggard, USMEF senior vice president for the Asia Pacific region.

While China/Hong Kong was the second-largest market for U.S. pork in 2008, pork exports to the region have declined in recent months due to China’s efforts to bolster its domestic pork production. China is currently closed to U.S. beef exports because the United States and China have been unable to agree upon an acceptable trade protocol.

China’s request for consultations is the first step in the WTO dispute settlement process. If consultations do not produce a resolution, China has the option of pursuing the case through the entire process – an approach that could take up to two years to produce a final result.  

Representatives from China’s Ministry of Commerce have been quoted as saying that Section 727 is a discriminatory and protectionist action and is not in line with the principles of Most Favored Nation treatment. Delegates representing China's poultry industry had threatened retaliatory action - including filing a WTO case - during the National People's Congress (NPC) in mid-March when President Obama signed the appropriations bill. China’s Ministry of Commerce has also stated its intention to take its case directly to U.S. lawmakers later this month during a state-sponsored buying mission to the United States.