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United States Wins WTO Trade Enforcement Dispute for American Farmers

WTO Panel Finds Against India’s Avian Influenza Restrictions on U.S. Agricultural Products

Washington, D.C. – United States Trade Representative Michael Froman announced today that the United States has won a major victory at the World Trade Organization (WTO) on behalf of U.S. farmers, including the U.S. poultry industry.   A WTO dispute settlement panel has found in favor of the United States in a dispute challenging India’s ban on various U.S. agricultural products – such as poultry meat, eggs, and live pigs – allegedly to protect against avian influenza.   The panel agreed with the United States that India’s ban breached numerous international trade rules, including because it was imposed without sufficient scientific evidence.

“This is a major victory for American farmers.  The WTO panel agreed with the U.S. case that India lacks any scientific basis to restrict U.S. agricultural products, including U.S. poultry products.  Our farmers produce the finest – and safest – agricultural products in the world,” said Ambassador Froman.  “This is the fourth major WTO victory the U.S. has announced this year as we continue to unlock economic opportunity for our workers, farmers, and businesses.  This victory affirms the Administration’s commitment to ensuring WTO Members play by the rules, and that America’s farmers, workers and businesses get the fair shot they deserve to sell Made-in-America goods under WTO rules.”

“Our farmers and producers deserve a level playing field – and this dispute reflects that we will accept nothing less,” said Secretary Vilsack.   “I am pleased that the WTO Panel determined that India’s ban on poultry is inconsistent with its commitments under the WTO SPS Agreement.  USDA will work in close partnership with USTR to ensure that U.S. poultry producers and processors have access to this important market.”

“This is a great victory for the United States and Georgia poultry, in particular. I have been working to open up India to U.S. poultry since this issue was brought to my attention,” said Senator Isakson. “I thank USTR, USDA, my colleagues in Congress and U.S. poultry producers for working toward this important decision. I am pleased that the WTO panel affirmed that measures to ensure food safety must be based on science and not a desire to restrict market access. Georgia is the fourth largest poultry-producing region in the world, so this means a great deal to our state economy.”

“Today’s announcement sends a strong message that the United States will demand a level playing field for U.S. grown and made products in the international marketplace and that the WTO will not tolerate member countries imposing artificial trade barriers,” said Representative Goodlatte. “American agriculture is dependent on access to global markets and a vibrant trade policy. This ruling opens the door for increased market access of U.S. livestock products, including poultry, which plays a key role in Virginia’s economy. I look forward to seeing the positive economic impact of this ruling.”

"This is good news for Delaware,” said Representative Carney. “The poultry industry is a critical piece of Delaware's economy, and open markets are key to our farmer's ability to grow their businesses. On behalf of Delaware farmers, I've pushed hard to stop India's unfair restrictions on poultry exports. I'm extremely pleased that a successful resolution has been reached. Delaware is well-positioned to take advantage of India's growing market."

This is the fourth significant WTO victory USTR has announced in 2014.  Previous WTO victories this year included:

  • In June, the WTO found that China breached WTO rules by imposing unjustified extra duties on American cars and SUVs.  In 2013, an estimated $5.1 billion of U.S. auto exports were covered by those duties.
  • In August, the WTO found that China breached WTO rules by imposing duties and quotas on exports of rare earths, tungsten, and molybdenum.  Those export restraints promote China’s own industry and discriminate against U.S. companies using those materials, which are key inputs by critical American manufacturing sectors, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum, and chemicals. 
  • Also in August, a WTO panel agreed with the United States that Argentina’s import licensing requirement and other import restrictions breach international trade rules.  The Argentine measures unfairly restrict the importation of U.S. goods into Argentina and potentially affect billions of dollars in U.S. exports each year, including computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, parts for oil field rigs, and refined fuel oil.  This dispute is currently under appeal.

Background:

For over seven years, India claimed it needed to restrict various U.S. agricultural products, including poultry meat, eggs, and live pigs, supposedly to prevent entry of avian influenza into India.  The United States, however, has not had an outbreak of high pathogenic avian influenza (HPAI) since 2004, while during that same interval India has had over 90 HPAI outbreaks.  The only other type of avian influenza detected in the United States since 2004 is low pathogenic avian influenza (LPAI) – an often symptomless disease that the United States can find because it maintains a state-of-the-art surveillance system to detect animal diseases.  The United States has consistently explained to India that, as reflected in relevant international standards, there is no scientific basis to ban imports of U.S. agricultural products.

The U.S. poultry industry, which directly employs over 350,000 workers and consists of nearly 50,000 family farms – has been particularly affected by India’s restrictions.  The industry estimates that U.S. exports to India of just poultry meat alone could easily exceed $300 million a year once India’s restrictions are removed – and are likely to grow substantially in the future as India’s demand for high quality protein increases.

The United States initiated this dispute by requesting consultations with India on March 6, 2012.  After consultations proved unsuccessful in resolving U.S. concerns, the WTO established a panel at the U.S. request to hear U.S. claims that India’s avian influenza restrictions are inconsistent with India’s WTO obligations.

In its report, the Panel that India breached its obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) because India’s restrictions:

  • are not based on international standards or a risk assessment that takes into account available scientific evidence;
  • arbitrarily discriminate against U.S. products because India blocks imports while not similarly blocking domestic products;
  • constitute a disguised restriction on international trade;
  • are more trade restrictive than necessary since India could reasonably adopt international standards for the control of avian influenza instead of imposing an import ban;
  • fail to recognize the concept of disease free areas and are not adapted to the characteristics of the areas from which products originate and to which they are destined; and
  • were not properly notified in a manner that would allow the United States and other WTO Members to comment on India’s restrictions before they went into effect.

A copy of the Panel’s report may be found here.

Under WTO rules, either party may request adoption of the panel report by the WTO within 60 days of the release of the report, and the report would be adopted unless an appeal is filed.  If the report is appealed, WTO rules provide that the WTO Appellate Body must issue its report within 90 days of the filing of the appeal.

USTR attorneys from the Monitoring and Enforcement unit of the Office of General Counsel and other USTR staff worked closely with the U.S. Department of Agriculture in preparing and litigating this dispute.  The Interagency Trade Enforcement Center (ITEC) also provided important research and support throughout the dispute.

 

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Businesses and communities throughout the United States are affected by the products at issue in this dispute – and ensuring market access is vital to their well-being.  According to these businesses, nearly 20 percent of U.S. broiler chicken production and 12 percent of turkey production is exported to overseas markets.