October 5, 2009

 

The US poultry industry is pressing US Trade Representative (USTR) Ron Kirk to bring a dispute settlement panel in the World Trade Organization against the European Union's 12-year ban on poultry processed with antimicrobial washes.

 

George Watts, president of the National Chicken Council, made the request in a September 24 letter sent after he and other industry representatives raised the issue briefly in a meeting with Kirk that day.

 

Backing a WTO challenge in addition to the National Chicken Council are the USA Poultry & Egg Export Council, National Turkey Federation and the National Association of Manufacturers.

 

Watts said that since official WTO consultations with the EU on February 11 made no progress in resolving the dispute, "it would be most appropriate to take the issue to the next step in the WTO dispute settlement process, namely requesting that the issue be addressed by a WTO dispute settlement panel."

 

Though Kirk made no commitment that he would request a WTO dispute settlement panel, he said his staff would continue to review options for pushing the EU on the issue, private-sector sources said. Kirk promised to be back in touch with industry representatives, but gave no time line on when the Obama administration may decide on the request, they said.

 

One source said that industry representatives took this as a positive sign since Kirk did not dismiss the possibility of bringing such a panel.

 

EU sources said this week that they had heard from private-sector sources that USTR was considering the US poultry industry's push for a WTO panel in the long-standing poultry dispute. But they said no one in the Obama administration has yet indicated what they plan to do.

 

These sources said that the EU remains unwilling to consider allowing the import of poultry treated with antimicrobial washes.

 

A private-sector source said that even though a WTO case could take years and the EU may never lift its ban on antimicrobial washes, the industry wants to press forward with a panel since it could discourage other trading partners from imposing similar bans on antimicrobial treatments. Russia has been considering such a ban for months, he said.

 

The request for the WTO panel was also partly driven by the fact that the industry also did not want the fight with the EU to remain on the back burner indefinitely.  The source also added that while there's no timetable for USTR to do the next step in the WTO process, after a time it does become a little bit stale.

 

The Bush administration requested WTO dispute settlement consultations with the EU on Jan. 16, days before leaving office.

 

One industry speculated that if the US were to pursue and win a WTO case, the result could be for the EU to pay compensation rather than allow US poultry to enter into the EU market, since it appears no closer to lifting the ban.

 

EU member states have twice rejected Commission proposals to grant access to US exports, which Commission officials promised to make as part of the bilateral Transatlantic Economic Council. Sources said they do not expect the issue to be raised when the first TEC of the Obama administration meets on Oct. 26-27 in Washington, DC, due to the lack of progress.

 

For months, industry representatives had debated whether to press Kirk to bring a panel since they feared that a WTO fight with the EU could detract from efforts to gain access in the larger markets of China and Russia.

 

The market access problems in China and Russia, the two largest export markets for US poultry, were raised more prominently than the EU poultry ban in the industry's meeting with Kirk, according to the Sept. 24 letter.

 

A potential WTO case could challenge the poultry ban as being inconsistent with the Agreement on the Application of Sanitary and Phytosanitary Measures, which was the argument cited by then-USTR Susan Schwab in the US consultation request.

 

Specifically, the consultation request claimed that the ban violates Article 2.2 of the SPS Agreement in which WTO members must ensure that 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 consultation request also cites the ban for violations of Articles 5 and 8, as well as Annex C.

 

Article 5 obligates members to determine risk and set the level of SPS protection in accordance with sound science, with the exception when relevant scientific evidence is insufficient. In that case, members can impose provisional measures subject to review in a reasonable time.

 

Article 8 is linked to the obligations of Annex C, which states that control, inspection and approval procedures for SPS measures be carried out without undue delay. In addition, the article says members shall ensure that their procedures are not inconsistent with the agreement.

 

In January 2006 a European Food Safety Authority's scientific panel found antimicrobial rinses "would be of no safety concern," and published 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.

 

The EU position on the antimicrobial washes for poultry is more intransigent than on the antimicrobial washes for US beef processing. The washes used on poultry are chlorine-based and seen as much more environmentally harmful, sources said. In contrast, the beef washes are citric-based.

 

The US is pressing the EU to approve the antimicrobial washes for beef in time for a second phase of the US-EU beef deal, which would open a tariff-rate quota of 45,000 tons. USTR argues that the US industry cannot reach that level of exports without having the washes approved, because parts of the carcasses must be sold domestically in the US

 

The WTO dispute between the US and the EU on the EU's 1988 ban on beef treated with artificial growth hormones began in 1996, and the ban remains in place. EU products have faced retaliatory sanctions with an annual value of US$116.8 million since 1998, which were recently reduced as part of the interim deal to allow the exports of US beef raised without artificial growth hormones.