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Another Trade Flap over Poultry

In a long-festering dispute between the US and the EU over poultry exports, the US seems to have finally given up any chance of winning the argument by way of reason and has formally initiated litigation at the WTO by requesting consultations with the EC on this matter, on January 16, 2009, before a meeting of the WTO's Dispute Settlement Body.

Under WTO rules, if consultations don't take place, or fail to resolve the matter, the US can move to have a panel established to adjudicate the matter at the latest within 60 days of its initial request for consultations of January 16.

The Poultry dispute should really come as a surprise to no one. The 2008 Trade Barriers Estimate Report, compiled and published every year by USTR, refers to the ban on US poultry exports to the EU as one of a long list of outstanding issues it has been trying to resolve with the EU for over a decade now. In fact, every annual edition of the Trade Barriers Estimate Report going back to at least 2001 has had something to say about the ban imposed by the EU on US poultry and poultry meat products processed with pathogen reduction treatments (PRTs), such as chlorine, to reduce the level of pathogens in poultry meat production.

US poultry exporters have been unable to export to the EU since April 1, 1997, which is when the EU began prohibiting the use of PRTs to decontaminate poultry carcasses sold there. Bloomberg, citing industry experts, states that the trade would likely be worth around USD 200 million annually, which is certainly enough to justify taking a case to the WTO to try and restore this lost market access. The US Department of Agriculture claims that US poultry exports globally are worth some US $2.2 billion per year, which means that when the US poultry industry starts clucking about lost market access, lawmakers and officials in Washington DC have little choice but to sit up and listen. The issue's regular inclusion in the USTR's Trade Barriers Estimate Report, and on-going efforts by US negotiators since the ban was imposed, to restore market access, are testimony to this clout.

In truth, this latest dispute is just another chapter in an on-going saga that dates back to the establishment of the Common Agricultural Policy in the 1960s. Ever since this time, US exports of poultry to Europe have had to contend with one market access barrier after another. It also represents just another of almost half a dozen trade disputes at either the GATT or WTO involving poultry imports into the EC.

The US poultry industry might have a lot of influence in Washington DC, but European poultry farmers are an equally formidable and immovable force, and it is unlikely that turning this problem over to litigation at the WTO will really have much of an impact in terms of market outcomes. As is the case with the intractable dispute over imports of hormone-treated beef, this is a problem that can really only be solved by negotiations, and US producers might just have to face up to the hard economic reality that Europeans just tend to be a lot more finicky about how their food is prepared than US consumers are.

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