China Hits at EU on Poultry Preferences to Brazil and Thailand

China filed a formal WTO complaint against the EU last week, challenging the measures that resulted from the 28-nation bloc’s move in 2006 and again in 2009 to negotiate changes to the tariff concessions listed in its goods schedule involving certain poultry products.

The EU ultimately negotiated and reached deals with Brazil and Thailand on both occasions, with the first agreements reached with the countries involved in 2006 and the second time in 2012. The latter changes took effect in March 2013.

Brasilia and Bangkok had both been considered to have “a principal or substantial supplying interest” in the products that would be affected by the changes in Brussels’ schedule.

Resulting quotas discriminatory, China says

Along with criticising the negotiating and consultation procedure itself, China has also challenged the outcome of the EU’s talks with Brazil and Thailand, which it claims led to Brussels assigning tariff-rate quotas that are “almost entirely or even entirely reserved” for Brasilia and Bangkok, as well as out-of-quota rates “significantly” above the bound rates prior to the changes.

Specifically, Beijing has cited a serious of provisions under the GATT’s Article XIII, which deals with the non-discriminatory administration of quantitative restrictions. For example, China says that the country-specific tariff-rate quotas that the EU agreed with Brazil and Thailand give the latter two countries an advantage in market access that discriminates against fellow WTO members.

Under WTO rules, the two sides must now hold consultations for a minimum period of 60 days in an effort to reach a mutually agreed solution. Should these talks fail to produce such an outcome, China can then ask the global trade body to establish a panel to hear the complaint.