Poultry Hygiene Row Pushed To The Brink

The dispute over meat standards which Tuesday erupted into trade hostilities between the US and the European Union grew out of a new provision contained in the Uruguay Round world trade agreement.

The dispute stems from a failure by the EU and the US to agree hygiene standards for processing plants for poultry and some other meat. The Uruguay Round provision covers health and hygiene standards for animals and processing plants the so-called sanitary and phytosanitary text and allows countries to accept imports provided these standards are equivalent in the exporting country.

US officials say the aim of the text was to overcome outdated demands by importing countries that trading partners exactly replicate their own domestic hygiene rules. These demands had included calls for exporting countries to copy the colour of the walls (in meat plants), the material used for knife handles and the square footage of toilets, said one official.

 

Under the new text, the US and EU have agreed veterinary equivalency rules on many animal products. But poultry, petfoods containing animal remains, red meat, dairy and egg products remain unresolved.

The EU is particularly concerned that US poultry plants do not meet its standards. The crunch cameon Tuesday when the EU, in the absence of equivalency agreements, introduced requirements that US food exports carry certificates stating they comply with EU standards. The US said it was unable to issue such export certificates and was taking retaliatory measures.

Trade disputes are frequently pushed to the brink before they are resolved. But since the formation of the World Trade Organisation in 1995, the US has increasingly chosen to use the bodys strengthened disputes settlement mechanism - rather than unilateral sanctions to resolve trade conflicts.

One reason Washington has not referred this dispute to the WTO is that it still hopes to pressure the EU into reaching a bilateral solution. Dan Glickman, agriculture secretary, said he wanted to continue to seek an acceptable agreement in the coming months.

However, Brussels said that the US action was regrettable and would not help talks.

Much of the sanitary and phytosanitary text is imprecise and open to interpretation. This was underlined on Tuesday when the Commission appeared to suggest the dispute had nothing to do with trade and was all about consumer welfare.

One advantage of bringing the dispute to the WTO would be to clarify how the text should work in practice. Under the WTOs dispute settlement procedure, the two sides would have 60 days to reach a bilateral agreement.

If this failed, a disputes panel could be set up to hear the case. If the panels findings were still disputed, the case would go to the WTO appellate body whose ruling would be binding.

A WTO panel is due to report by the end of May on another dispute between the US and the EU over meat hormone-treated US beef.

The US complained to the WTO last year about the EUs import ban, triggering a counter-complaint by the EU against retaliatory US sanctions that had been in place on a range of foodstuffs since the row began in the late 1980s. The US dropped its sanctions, leaving the main case still to be resolved.