International Trade Law Essay Example

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THE SPS AGREEMENT’S IMPACTS ON AMERICAN POULTRY INDUSTRY 14

THE SPS AGREEMENT’S IMPACTS ON AMERICAN POULTRY INDUSTRY

Executive Summary

World Trade Organization (WTO) refers SPS measures as sanitary and phytosanitary (SPS) measures and possesses a significant duty in determining global trade’s flow. SPS measures report turns to be reports of those procedures, regulations, decrees, requirements and laws that are applied by governments for protecting plant, animal, or human health, or life, from risks emanating from the spread or entry of animal-, or plant-borne diseases or pests, or from disease-causing organisms, contaminants, additives or toxins in feedstuffs, beverages or foods. Admittedly, the U.S robustly supports the governments’ rights via strong regulatory frameworks for the purposes of their people, plants and animals from risks of health of that type. In addition, the U.S robustly supports augmented technical assistance and cooperation taking in, the Standards and Trade Development Facility (STDF) and APEC to enhance the hazard evaluation abilities of every member state.

Moreover, the U.S governs some programs for building expertise in overseas nations concerning plant health, food safety, biotechnology, and animal health. However, sometimes, SPS measures are imposed by governments that are protectionist trade barriers cover-up, having no ground in science, or the ones which turn to be otherwise unjustifiable, and that which make big hindrances to the exports of U.S. For instance, several nations have utilised the BSE (Bovine Spongiform Encephalopathy) and AI (Avian Influenza) threat as the reason for blocking trade in United Sates beef and poultry meat correspondingly, overlooking global science-based principles that set up suitable mechanisms for tackling those illnesses.

Table of Contents

Introduction……………………………………………………………………………………………………….4

The World Trade Organization Agreement on Sanitary and Phytosanitary Measures’ Application………………………………………………………………………………………………………….5

Impacts of the SPS (Sanitary and Phytosanitary Measures) Agreement on the American Poultry Industry…………………………………………………………………………………………………….5

Conclusions and Recommendations………………………………………………………………………….13

Bibliography…………………………………………………………………………………………………………..14

Introduction

In fact, the meaning of SPS is Sanitary and Phytosanitary measures. SPS measures report turns to be reports of those procedures, regulations, decrees, requirements and laws that are applied by governments for protecting plant, animal, or human health, or life, from risks emanating from the spread or entry of animal-, or plant-borne diseases or pests, or from disease-causing organism, contaminants, additives or toxins in feedstuffs, beverages or foods. For instance, the US together with other governments normally apply measures at their boundaries for protecting livestock, and domestic crops from animals, or agricultural products that are imported that might introduce an animal disease or plant pest in the state. Those measures referred in World Trade Organization (WTO) terms as sanitary and phytosanitary (SPS) measures, possesses a significant duty in determining global trade’s flow.

However, sometimes, SPS measures are imposed by governments that are protectionist trade barriers cover-up, having no ground in science, or the ones which turn to be otherwise unjustifiable, and that which make big hindrances to the exports of U.S. For instance, several nations have utilised the BSE and AI threat as the reason for blocking trade in United Sates beef and poultry meat correspondingly, overlooking global science-based principles that set up suitable mechanisms for tackling those illnesses. Admittedly, the U.S robustly supports the governments’ rights via strong regulatory frameworks for the purposes of their people, plants and animals from risks of health of that type. The focus of this paper is therefore on SPS measures which seem to be discriminatory, unwarranted, unduly burdensome, and unscientific and produce huge barriers to exports of the United States, therefore causing impacts to its poultry industry.

The World Trade Organization Agreement on Sanitary and Phytosanitary Measures’ Application

The Agreement of SPS, to which the entire WTO Members turn to be parties, clearly identifies that governments possess the rights of adopting plant, animal and human health, or life, consisting of measures and food protection regulations to safeguard poultry, livestock domestic crops and livestock – and to set up the protection levels from hazard that they consider suitable. In this scenario, the SPS Agreement institutes various procedures and general requirements for ensuring that governments apply and espouse SPS measures for safeguarding against actual risks instead of protecting domestic goods from competition of importing. In addition, where suitable, the harmonization of SPS Agreement is encouraged among Members of WTO.

Impacts of the SPS (Sanitary and Phytosanitary Measures) Agreement on the American Poultry Industry

In fact, a number of U.S trading partners fail to base their measures of SPS scientifically, like are the requirements of the SPS Agreements. Regrettably, a number of trading partners put other aspects in front; regard them alongside, scientific standards during applying or instituting certain SPS measures. A number of trading partners put in place SPS measures focusing on domestic product protection, for instance, taking care of preferences of local consumers. Despite the SPS measures, the U.S and other nations have faced unjustifiable import bans from several nations on her poultry products and poultry grounded on alleged issues over Avian Influenza (AI), frequently mentioning outbreaks of isolated LPAI (Low Pathogenic Avian Influenza) causing effects to the poultry industry as investigated in various countries’ reports in this paper.

First, Korea has established measures regarding scrutiny of agricultural products imports, counting poultry from the U.S1. On May 24th 1996, the U.S called for talks with Korea regarding inspection, testing as well as other measures demanded for the Korea’s agricultural products imports. The U.S alleged that those measures hamper poultry imports and seem not to be consistent with WTO Agreement. There are claims of infringements of SPS Articles 8, 5 and 2, GATT Articles XI and III, Article 4 of Agriculture’s Agreement and TBT Articles 6, 5, and 2. Second, United States is alleged by Canada to offer support favouring domestic producers including poultry producers having extra commitment levels stipulated within Section 1 of part 1V of the Schedule, opposite to Article 3.2 of the Agriculture’s Agreement2.

Brazil, a third party state in the case, alleges violations of Articles 10.1, 8, 3.3 and 9.1 of the Agriculture’s Agreement together with Articles 3.2 and 3.1 (a) of Subsidies and Countervailing Measures (SCM) Agreement. Canada, on November 8th 2007 requested the institution of a panel.

Third, China has put in place a zero acceptance limit for the broiler products from the U.S3. At the fall of September 20th 2011, the U.S called for talks with China regarding measures of China on imposing countervailing and anti-dumping duties on broiler products originating from the U.S. The U.S pointed out that the measures seemed to be in conflict with different Anti-Dumping Agreement provisions connected to the anti-dumping investigation process, and the anti-dumping duty willpower in due course among others. In this case, the U.S claims infringement of Articles 3.1, 3.4, 1, 6.8, 2.2, 3.2, 4.1, 3.5, 12.2, 6.2, 6.9, 6.5, 5.1 and 6.4 of the Agreement of Anti-Dumping. Further, the U.S alleged that the measures seem to be a violation of different SCM Agreement provisions connected to the subsidy investigation process together with the countervailing duty willpower in due course.

The U.S claims infringement of Articles 22.4, 12.7, 10, 15.5, 22.3, 22.5, 15.4, 12.3, 15.2, 12.7, 15.1, 19.4 and 11.1.Also, the U.S discovered that the measures turn to be in violation of Article VI of the GATT 1994 due to the outcome of the claimed infringement of the SCM and Anti-Dumping Agreements. The U.S called for the making of a panel to solve the issue. The U.S finally made extra allegation under Articles 12.2.2 of the Agreement of Anti-Dumping, as well as 22.5 of the Agreement of SCM respective to failure of MOFCOM’s explanation, within its public notice of the Final CVD and AD Determinations, the grounds for its refusal of the agreement of the US on balanced trade. China’s objection that the allegations were outside its reference terms’ was rejected by the panel as they turned to be never recognized within the demand for making of a panel, and ruled in favour of the U.S allegations upon the virtues.

In the wake of October 22nd 2013, China told the DSB of its intent of implementing the DSB rulings and recommendations in way which would comply with the WTO requirements and that it would require enough amount of time for doing so. On 15th July 2014, U.S and China notified the DSB of decided processes under DSU’s Articles 22 and 21. As a result, the poultry industry of U.S has been negatively affected by the China’s decision of banning poultry imports from the U.S. The other SPS Agreement affecting the U.S. poultry is on the European Union (EU)4. On January 16th 2009, the U.S called for discussions with the European Communities (EC) concerning particular measures having effect to poultry meat products and poultry meat from the U.S. The U.S have the information that the EC forbids the poultry treated import having whichever substance apart from water except if that substance turn to be endorsed by the EC.

Therefore, chemically processed poultry is a prohibited import by the EC which successfully prohibits the shipment of almost the entire United States to the European Union. Surprisingly, the EC is yet to make available or publish the procedures of substances approval. The U.S claims that the measures of EC are in violation of WTO obligations of EC comprising of GATT 1994 Articles, X:1 and XI:1; Article’s 2 TBT Agreements; SPS Agreement Articles 8, 5 and 2.2 as well as Annex C (1; and Agriculture Agreement Article 4.2 among others. The U.S claims that the measures of the EC seem to impair or nullify the advantages amassing to the U.S either indirectly or directly under the SPS agreements. The U.S called for the formation of a panel that was created on November 19th 2009. The lawsuit has still not yet been decided.

The EU ban on poultry products has negatively affected the United States poultry industry in that; the U.S has sharply decreased the production of poultry products that are processed using pathogen reduction treatments (PRTs). On the other side, under the VEA (Veterinary Equivalency Agreement), the European Union made an agreement that shell eggs and egg products from the U.S categorically meet the suitable echelon of European Union sanitary protection. Also, the VEA asserts that the U.S can substantiate set ups for export for the entire member states, counting Romania. Romania has, however, not accepted suppliers of processed or fresh eggs from non-EU members like the U.S5. Romania has instituted uninformed maximum and minimum prices of imports like, eggs, meat, and fruits among others as asserted by the U.S. Further, Romania has established troublesome processes for scrutinizing prices of import when value of c.i.f. falls beneath the minimum price of import.

The U.S considers Romania’s measures to be in violation of Articles 1-7, and 12 of the Agreement of Customs Valuation, and Articles XI, X and II of GATT 1994. On September 26th 2001 Romania and U.S notified the DSB their mutually agreed solution pursuant to DSU’s Article 3.6. India, on the other hand, has prohibited the importation of poultry from the United States since 20066. The U.S. complains that AI measures of India were equal to prohibition of import which had no grounds on the pertinent scientific risk analysis or international standard (the OIE Terrestrial Code). The claim of the U.S is that the measures seem to be conflicting with Articles 7, 5.1, 2.3, 6.2, 5.3, 2.2, 5.7, and 3.1 among others of the SPS Agreement.

Unfortunately, the Philippines have implemented SPS measures that affected the importation of poultry from the United States7. The U.S requested discussions on Philippines’ establishment of tariff-rate quotas, especially the hold-up in allowing admittance to quantities of in-quota as well as the system of licensing utilised to govern admittance to the in-quota amounts, seems to be infringement of the Philippines’ obligations under Articles XI, X and III of GATT 1994, Agreement on Agriculture Article 4, Articles 3 and 1 of the Import Licensing Procedures Agreement, and TRIMs Articles 5 and 2.

China believes that the U.S via section 727 as well as whichever closely connected measures, turn to infringe, at least, Articles XI: 1, I: 1 of GATT 1994 as well as Article 4.2 of the Agreement of Agriculture. On June 23rd 2009, China called for the setting up of a panel. Respective to China’s allegations under Article 4.2 of the Agriculture Agreement, the panel, on judicial economy grounds avoided making ruling in favour of China’s allegations under Article 4.2 of the consent on Agriculture, as it revealed that Section 727 turned to be conflicting with Article XI: 1 of the GATT 1994. Though the panel discovered many infringements, it never suggested that the DSB demands the U.S to adopt Section 727 with its requirements under the GATT 1994 and SPS Agreement, as Section 727 turned to be outdated. During the October 25th meeting, the panel report was adopted by the DSB.

Through the United States implementing certain SPS measures to China’s imports, the poultry industry of U.S was negatively affected by having less poultry and poultry products from China.Unfortunately; the U.S has implemented mechanisms affecting European Communities’ imports of poultry products to the U.S8. The EC on August 18th 1997 called for discussions with the United States concerning imports prohibition of poultry products and poultry from the European Communities by the United States Agriculture’s Food Safety Inspection Service Department, and whichever associated measures. The EC argued that though the prohibition is purportedly on product safety grounds, the import block never showed the basis on which the poultry products of EC turns to be disqualified for access in the market of U.S. The EC believed that the ban turns to violate Articles XI, III, X and I of GATT 1994, Articles 8, 4, 2, 5, 3 and Annex C of SPS Agreement, or TBT’s Agreement Article 2 and 5.

In fact, the poultry industry of the U.S was affected in a negative way by implementing uninformed SPS measures that affected the EU’s poultry imports to the U.S by having no supply of poultry from the European Communities.

Conclusions and Recommendations

The measures referred in World Trade Organization (WTO) terms as sanitary and phytosanitary (SPS) measures, possesses a significant duty in determining global trade’s flow. However, sometimes, SPS measures are imposed by governments that are protectionist trade barriers cover-up, having no ground in science, or the ones which turn to be otherwise unjustifiable, and that which make big hindrances to the exports of U.S poultry. For instance, several nations have utilised the BSE and AI threat as the reason for blocking trade in United States beef and poultry meat correspondingly, overlooking global science-based principles that set up suitable mechanisms for tackling those illnesses. Various Articles have been seen to be violated by various nations in the precept of implementing SPS measures.

For instance, all India’s AI measures were found to be in conflict with the SPS Agreement’s provisions by the panel which found it needless to judge on the claim of the U.S under Article XI of the 1994’s GATT in the case of U.S v India on India’s ban on U.S poultry imports. The SPS Agreements have caused the U.S poultry industry to fall significantly. The U.S looks to ensuring that governments turn to base their measures of SPS on hazard assessments and science, and cease utilising SPS measures as camouflage limitations on global trade. To this far, the U.S turn to be devoted to collaborating with trading cohorts on SPS concerns, and to giving technical help, where suitable, to assist other nations achieve their global duties and fuel trade in products of agriculture.

In order to eliminate unwarrantable restrictions of trade, a common workshop of professionals inclusive of all nations needs to be formed that would assist in checking the parties that would be overstepping the actual SPS Agreements.

Bibliography

Froman Michael, 2014 Report on Sanitary and Phytosanitary Measures, 2014 <https://ustr.gov/sites/default/files/FINAL-2014-SPS-Report-Compiled_0.pdf>.

Johnson Renee 2014, Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade, 2014http://nationalaglawcenter.org/wp-content/uploads/assets/crs/R43450.pdf>.

Victor David 2002, ‘The Sanitary and Phytosanitary Agreement of the World Trade Organization: An Assessment after Five Years’ (2002) 32, Journal of International Law and Politics,

World Trade Organisation, Philippines – Measures Affecting Pork and Poultry, 2015 < https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds74_e.htm>.

World Trade Organisation, Venezuela – Import Licensing Measures on Certain Agricultural Products, 2015 <https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds275_e.htm>, [Accessed 16th November 2015]

World Trade Organization, China – Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States, 2015 < https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds427_e.htm >.

World Trade Organization, European Communities – Certain Measures Affecting Poultry Meat and Poultry Meat Products from the United States, 2015 < https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds389_e.htm >

World Trade Organization, Romania – Measures on Minimum Import Prices, 2015 < https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds198_e.htm >.

World Trade Organization, United States — Certain Measures Affecting Imports of Poultry Products, 2015 <https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds100_e.htm>.

World Trade Organization, United States – Certain Measures Affecting Imports of Poultry from China, 2015 < https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds392_e.htm >

1 Korea implemented measures regarding all agricultural products’ imports inspection from the U.S. This made the U.S to call for deliberations with Korea regarding inspection, testing and other instituted measures on agricultural imports in disfavour of the U.S. No establishment of a panel, no withdrawal, or jointly concurred solution witnessed by the parties.

2 The U.S offered support to her domestic producers more than the commitment levels stipulated within Section 1 of portion IV of the Schedule. Indeed, the U.S did opposite to Article 3.2 of the Agriculture’s Agreement. That made Canada to request talks with the U.S, and finally Canada called for the making of a panel.

3 China imposed countervailing and anti-dumping duties measures on U.S’s broiler products. The U.S cited inconsistency with the implemented measures on different SCM agreements and Articles. On July 15th 2014 the U.S and China notified the DSB of concurred processes under DSU’s Articles 21 and 22.

4 The EC implemented particular measures that affected imports of poultry meat products and poultry meat from the U.S. The U.S alleges that the ban on treated poultry with whichever substance totally barred the U.S from importing poultry to the E.C. The U.S called for the institution of a panel to solve the issue.

5 Romania had implemented particular measures on minimum prices of import on poultry meat from the U.S. Additionally; Romania had also established oppressive processes for examining prices of imports the moment the c.i.f value fell beneath the minimum import cost. Fortunately, Romania and the U.S arrived at a common amicable solution respective to DSU’s Article 3.6 on September 26th 2001.

6 India banned U.S imports of poultry on concerns associated to Avian Influenza. This made the U.S to call for the formation of a panel to investigate whether India’s measures were consistent with various SPS Agreements provisions’. India on July 13th 2015, told the DSB of its intention to institute the recommendations and rulings of DSB in the way that would honour its WTO requirements.

7 The Philippines implemented measures like, tariff-rate quotas and the licensing system to administer entry of the in-quota quantities, thus adversely affecting U.S poultry imports to the Philippines. The U.S called for discussions with Philippines on the implemented measures under complain, where they came up with an agreeable common answer to their disagreement.

8 The U.S implemented measures that banned the EC’s poultry and poultry products exportation to the U.S on unknown grounds. In response, the EC called for talks with the U.S concerning the prohibition of exporting poultry products and poultry from the European Communities by the Department of Agriculture’s Food Safety Inspection Service of the U.S together with any connected measures. The EC regarded the ban as inconsistent with various Articles of SPS Agreements, GATT 1994 Articles and TBT Agreement Articles like, Article 5 and 2.