January 27, 2009

  

US requests WTO consultations on looming legal proceedings against EU on poultry trade tiff

 

 

As the Bush government filed the protest, the Barack Obama administration is left to decide to whether it will allow the poultry dispute to remain indefinitely in the consultation phase or press ahead with a dispute settlement panel.

 

The decision can prove to a high-profile challenge to the EU's regulatory philosophy. In a statement of then-US Trade Representative Susan Schwab on January 16, she accused that the ban on antimicrobial rinses is not based on science and an unjustified trade barrier.

 

Schwab said the US' step to WTO consultations "seeks to move the process forward and will act to defend poultry and other US agricultural exports against non-science based restrictions imposed by our trading partners."

 

The former USTR rep said EU's own scientists have repeatedly found these (anti-microbial) treatments not only to be safe, but effective.

 

She was apparently referring to a scientific opinion published in January 2006 by a European Food Safety Authority's scientific panel that found antimicrobial rinses "would be of no safety concern."

 

However, EFSA's Panel on Biological Hazards released a scientific opinion in April 2008 which found that there was "insufficient evidence to conclude that using the antimicrobial agents could cause them to be ingested and provoke dangerous resistance to antibiotics in people."

 

According to a private-sector source, representatives of the US poultry industry plan to request a meeting with Obama and urge him to pursue the poultry dispute.

 

The US poultry industry earns an estimated US$50 million in US poultry exports EU before the region imposed rules against poultry processed with what is known as pathogen reduction treatments (PRTs) in 1997. The EU's expansion to 27 countries makes the region a lucrative market worth US$200 million to US$300 million in annual sales if the rules were lifted. According to USTR's Jan. 16 consultation request, the poultry ban is inconsistent with the EU's WTO obligations under the Agreement on the Application of Sanitary and Phytosanitary Measures, the General Agreement on Tariffs and Trade, the Agriculture Agreement and the Agreement on Technical Barriers to Trade.

 

Under Article 2.2 of the SPS Agreement, WTO members must ensure that their measures are only applied to the extent necessary to protect human, animal and plant life or health, are based on scientific principles and are not maintained without scientific evidence.

 

The US also cites Article 5 of the SPS agreement, which relates to risk assessment and the appropriate levels of protection along with Article 8 on control and inspection and approval procedures. These procedures must be undertaken and completed without undue delay and treat imports no less favourable than domestic products.

 

Two EU officials claimed that there is no national treatment violation against this Article 8 obligation and the US has mistaken the new regulations as a ban, stating that there is "no ban on poultry for the US and that "these are neutral regulatory measure in the EC that apply to both domestic and imported goods alike.

 

Another EU source said that there is no discrimination involved in the EU poultry rules and that "[antimicrobial] process is forbidden in the EU and also forbidden for imports into the EU," the source said. The source added that it is clear that the US can export poultry to the EU provided, of course that the poultry does not go through this process in the US.

 

Article 5.4 of the SPS agreement says that members must take into account scientific evidence when assessing risk and should "take into account the objective of minimizing negative trade effects."

 

One EU source said it would be difficult for the EU to argue against the US allegations of SPS violations since the European Commission determined that such treatment was not a health hazard and introduced a proposal to allow poultry treated with antimicrobials into the EU.

 

According to government journal Inside US Trade on June 6, the proposal was overwhelmingly defeated by member states in the Commission's Standing Committee on Food Chain and Animal Health. The same proposal was again defeated by the Agriculture Council later that year (Inside US Trade, Dec. 26).

 

The European Commission proposal, which was opposed by the US, would have required that companies shipping poultry to the EU must perform antimicrobial treatments before carcasses enter chilling rooms. It stipulated that only whole carcasses rather than chicken parts can be treated.

 

The EU source said that the "commission itself has made the proposal to accept these treatments based upon the scientific assessment and that WTO case should not be ignored".

 

The source said that commission may point to safety concerns that its scientists raised when that proposal was being drafted, but that argument would be difficult since those were not reflected in the final rule.

 

The source added that the commission will find arguments to show that there are scientific questions that are open still and need to be evaluated. However, the fact that cannot be denied that on the basis of the available information the commission had initially made the proposal to allow the treatments.

 

This means that on scientific grounds the EU is in "a difficult position" on the antimicrobial rinse issue.

 

At the same time, the source said that a potential WTO challenge would go to the heart of the EU's regulatory philosophy which is focused on prevention not intervention.

 

The trade source said EU wants ensure that "our businesses prevent contamination of the carcasses rather than eliminate it at the end of the slaughter process." Allowing a decontamination of the carcass would compromise the philosophy of the European food safety system and its emphasis on preventative controls.

 

The US consultation request also cites Articles X:1 and XI:1 of the General Agreement on Tariffs and Trade, which respectively stipulate that trade regulations must be "published promptly" in order for governments to become acquainted with them, and that countries cannot impose restrictions "other than duties, taxes or other charges."

 

According to USTR consultation request, the EC "has not published or otherwise made available the process for approving a substance."

 

Under current EU rules, the EU prohibits the import of poultry treated with a substance other than water, unless that substance has been approved. Nearly seven years ago, the US requested formal EU approval of four chemicals: chlorine dioxide, acidified sodium chloride, trisodium phosphate and peroxyacids. The US Food and Drug Administration and the US Department of Agriculture have approved these in poultry processing, but they have not been approved in the EU.