October 20, 2006

Brazil's chicken industry does not see WTO dispute with EU

Brazil's chicken exporters don't see any reason to take their trade dispute with the European Union on new chicken tariffs to the World Trade Organisation, the president of the Brazilian Association of Chicken Producers and Exporters, or ABEF, said Wednesday (Oct 19).

Ricardo Goncalves, ABEF president, said the EU was within its rights under article 28 of the old General Agreement on Tariffs and Trade that permits WTO member countries to raise import tariffs as long as they give trade concessions in other areas.

The EU is raising tariffs on imported processed chicken meat. No change has been made on import tariffs and quotas for fresh, frozen chicken, which is most of what Brazil ships to EU nations. However, 87 percent of Brazil's higher-value processed chicken meat goes to EU markets, up from 76 percent in 2005. Overall, Brazil ships roughly 350,000 tonnes of chicken to the EU each year.

ABEF officials met twice with EU negotiators last month, but trade talks ended in an impasse. The Brazilian government is studying whether it can legally challenge the EU in the WTO.

Goncalves said the biggest dispute at this point is the quota system.

"We want more transparency. Right now the EU thinks that we are monitoring quotas and distributing duty-free quota volume to our exporters, but that is not the case," Goncalves said.

"We want the EU importers to administer it and tell us what volume we are selling is within the duty-free quota and which one is not, because if it is not and we have to pay 15 percent or more per tonne, that changes our prices, and often we don't have the price negotiating power because we don't know what's within quota and what isn't," he said.