There have been two major events in spring 2012 that have focussed the attention of the poultry industry on trade. The first has been the decision of the EU to lift the ban on imports for fresh Thai poultry meat after EU Member States agreed that the ban imposed in 2004 at the height of avian influenza concerns is no longer justified. The European Commission has officially recognised Thai efforts to eradicate the highly contagious pathogen, which spread from South East Asia in mid-2003 and affected more than 60 countries, including some in Europe.

The second major event was the publication of the decision of the European Council on the Agreement between EU and Brazil and Thailand, respectively, pursuant to Article 28 of the General Agreement on Tariffs and Trade (GATT) 1994. This relates to the modification of concessions with respect to processed poultry meat provided for in the EU Schedule annexed to GATT 1994.

WTO: DOHA Moving Forward?

The negotiations for a new WTO agreement are in a firm stalemate. It looks like agriculture is no longer being blamed for this since in the other areas, such as NAMA (non-agricultural market access), environmental goods and services, the different positions could not be bridged either. The outlook for future progress is not positive with the elections in the US coming closer and the ongoing economic crises. This is demonstrated also by the increased activity on bilateral negotiations.

The GATT Art.28 negotiations on harmonisation of the import duties for poultry falling in CN code 1602 were concluded on 23 April 2012 (see text above).

WTO Dispute Settlements

India's ban on US poultry imports dispute

The US has approached WTO after its talks with India failed to resolve the dispute between the two countries. US claims that India's ban on US poultry imports due to avian flu fears is not scientifically justified. The move by the US to seek consultations with India over the trade is the first step in the dispute settlement process. India argues that its measures are aimed at preventing entry of avian influenza but US officials argue that the measures are inconsistent with the relevant science, international guidelines, and the standards India has set for its own domestic industry. This case may interest also producers and officials in the EU.

Argentinian protectionist measures

The EU has launched an offensive against Argentina's import restrictions at the WTO in June 2012. The EU has requested consultations with Argentina to lift its restrictive trade practices that include a pre-approval system applicable to all products since February 2012, a non-automatic import licensing regime and the obligation of companies to balance imports with exports. The impact is not that much on the EU agricultural side since EU is not a big exporter to Argentina but it may impact further the Mercosur talks.

EU-US litigation PRT poultry meat

a.v.e.c. has followed the discussions regarding the EU's restriction on imports of US poultry treated with pathogen reduction treatments (PRTs) but in 2011 no further actions were registered.

Mexico and Canada

Mexico and Canada filed in April counter appeals with the WTO in the on-going dispute with the US over mandatory country-of-origin labelling. The US may have to stop requiring retailers to display country of origin labels on meat after losing the bulk of its appeal 29 June 2012.

US-China

The WTO Dispute Settlement Body has set up a panel to probe US claims that Chinese anti-dumping and countervailing duties on US broiler imports flout WTO rules.

Beijing has argued the necessity of the duties claiming that US poultry product producers are benefitting from unfair subsidies, which allow them to undercut products on the Chinese market.

The move may also have been prompted by complaints from Chinese authorities that the US was breaching international trade rules by holding up imports of Chinese poultry products. A WTO panel was set up in July 2009 to look into Chinese complaints over the US Omnibus Appropriations Act of 2009, which contains a section prohibiting any funds being used to process imports of poultry products from China.

Brazil versus South African poultry duties

Brazil has addressed the WTO concerning the imposed provisional anti-dumping duties imposed by South Africa on Brazilian poultry products on the grounds that these imports were causing harm to the industry in the South African Customs Union. All whole frozen chickens coming from Brazil are being subject to an additional 63 per cent duty, while additional duties ranging from six to 47 per cent were imposed on boneless cuts .The first stage of the dispute settlement dispute, the consultation, was on-going in July 2012.

Regional and Bilateral Trade Regions and Negotiations

In general, poultry is a sensitive sector. It is important that poultry meat quota offered and agreed in a bilateral trade agreement are included in any WTO quota and Mercosur trade agreement.

a.v.e.c.'s concern is that a point might be reached where the EU has agreed to dozens of FTAs, each with relatively small TRQs for poultry but which add up to a very substantial amount of poultry meat that can be imported in to the EU at very low, if any, custom rates. Moreover, the quota should not be aggregated but should be equally divided over quotas for boneless cuts, cuts with bone-in and poultry carcasses.

a.v.e.c. is strongly advocating for a 'single pocket' approach to TRQs as regards poultry meat and products.

Andean (Colombia, Peru) and Central America

Negotiators from the EU, Colombia and Peru have signed a comprehensive trade agreement, paving the way for the formal signing and ratification of the accord. The agreement should enter into force by the end of 2012. Based on the principle of regional integration, the deal remains open for signature by Ecuador and Bolivia, the other two members of the Andean Community.

Mercosur

According to the announcement made in July 2012, Mercosur will see Venezuela join as a full member by July 2012 and current member Paraguay has been temporarily suspended from the Mercosur grouping.

The European Commission finalised assessments of the possible impacts of an EU trade deal with the Mercosur bloc and concluded that the EU agri-food producers would face significant income losses, with estimates varying between 4.6 billion and 7.75 billion, according to different scenarios. The total loss to the meat sector under this scenario is over 5.8 billion, of which 0.8 billion falls under the poultry sector. The EU has committed to exchange market access proposals with the Mercosur trade bloc under Brazil's chairmanship of talks in July 2012 but it has been postponed. SPS and animal welfare issues have to be discussed.

For Brazil, poultry is the second most important issue. a.v.e.c. mentioned that not only the quotas but also their management is important, especially since some American companies in the poultry sector have a base both in the EU and Mercosur area. The single pocket approach will be used.

a.v.e.c. is following the negotiations closely.

ASEAN and ASEM and Bilateral Talks

China

As regards future developments between EU-China, so far, the Chinese government has shown prudence in moving forward. China wants to be eligible to export heat-treated poultry products from the provinces of Fujian and Henan.

The FVO visited the provinces in October 2011 and found that overall the animal health controls systems are in place but that the officials must ensure rigorous official controls, traceability and adequate heat treatment. Shortcomings were also noted in the area of disease surveillance, control and notification (avian influenza, Newcastle disease). Finally, there is a lack of equivalency in the accompanying certification. China will be asked to address this before the provinces can be approved for export.

South Korea

In the first months of 2011, the EU and South Korea completed all the procedures necessary for provisional application of the FTA as of 1 July 2011. The implementation phase of the FTA is now ongoing to ensure that the mechanisms used are efficient and effective in providing market access for EU businesses in South Korea and Korean businesses in the EU. The EU is on the offensive regarding agricultural interests and a positive trade balance with Korea (spirits, pork meat, gluten, starch). In December 2011, the first meeting of the FTA Customs Committee took place.

Singapore

Both parties are trying to conclude the negotiations by end of 2012. EU negotiators are in dialogue now with Singapore officials and a political deal could be reached perhaps in summer this year.

India

Negotiations between the EU and India for an FTA are on-going with the aim of establishing the largest trade pact in the world. India's agricultural sector has shown some strong resistance to the talks, citing concerns over a negative impact on rural employment from an influx of EU dairy products. An SPS issue exists in the case of poultry since India is not following the OIE rules on eg. avian influenza restrictions.

As regards animal welfare standards, the Indian negotiators are showing no interest in observing these in the negotiations. The EU has very offensives interest in agricultural good including processed agricultural products.

Thailand

With Thailand, a long and informal contact took place and now the EU is hoping that concrete discussions shall be started soon. The EU is in negotiations with Thailand on an upgraded Partnership and Cooperation Agreement (PCA) which will extend the areas of cooperation. The exports of fresh poultry meat to the EU have been resumed from 1 July 2012 as detailed above in the introductory section.

Malaysia

Negotiations on an FTA are on-going with the aim to conclude them by end of 2012.

The next round of discussions was scheduled for June 2012 but has been postponed to September.

Indonesia

Since 2011, no progress on the scoping exercise FTA has been made.

Viet Nam

The EU and Viet Nam will begin official talks towards an FTA after having completed preparatory discussion. First round of talks was planned after the 2012 summer break. Viet Nam's exports to the EU are mainly in the clothing and textile sectors, but food products include coffee and seafood. The majority of EU exports to Viet Nam have been high-tech products including vehicles and electrical equipment.

Japan

Both parties have committed in 2012 to start the discussions for an FTA The EU poultry industry will face strong competition from Brazil, and likely Thailand and China will have an interest in exporting poultry meat to Japan while USA has already signed an FTA with Japan. Japan is the second most important trade partner in ASIA and a possible FTA will boost the EU economy.

Other Bilateral Negotiations

Canada

Both parties are committed in the negotiations and the agreement aims to be both ambitious and comprehensive. Meanwhile European Parliamentarians are backing the steps forward for an Agreement but highlighting the need to comply with EU rules on genetically modified crops, milk and origin labelling.

Russian Federation

Once Russia has officially joined the WTO, expected in July 2012, developing countries will enjoy lower duties and increased consumer demand boosting their food exports, a study by the International Centre for Trade and Sustainable Development claims. Once in the WTO, Russia must adjust its trade rules in line with its WTO commitments or it would be possible for a case to be taken to the WTO dispute mechanism.

In the framework of the WTO accession the quotas agreed for poultry meat are: 100,000 tons for MSM tariff code, of which 80,000 tons is for the EU, and 250,000 tons of poultry legs. This quota will be adopted in the mid-summer WTO meeting.

Russia wants to export poultry meat to the EU. a.v.e.c. has reminded the European Commission that the latest FVO inspection report states that the Russian official controls for poultry meat intended for export to the EU do not fully deliver the guarantees required in the relevant export certificate.

Ukraine

EU and Ukraine negotiators have finalised the text of an association agreement, including the completion of a free trade zone. The way is now open for technical completion of the final consolidated version of the Agreement with a view to its initialling as soon as possible. With Ukrainian parliamentary elections set for October 2012 and former Prime Minister, Yulia Tymoshenko, still in prison, advancement in the ratification process could be set back if election monitors uncover discrepancies.

The ceilings negotiated for poultry meat in the last round of negotiations are: 8,000 to 10,000 tons for poultry meat and an additional quota of 10,000 tons for frozen carcasses (all expressed in net weight) to be opened by Ukraine for EU and EU shall allow from Ukraine 16,000 to 20,000 tons poultry meat and poultry meat preparations and in addition 20.000 tons for frozen carcasses (all expressed in net weight) and with a linear increase in five years' time.

Moldova, Georgia and Armenia

EU launched free trade talks with Moldova and Georgia in December 2011. A deal could enhance political stability and security in both countries and boost the GDP. Both countries already benefit from preferential access to the EU market, meaning that existing import duties are already at a very low level.

a.v.e.c. is closely following developments on this matter. The EU is a net exporter in trade with the Caucasian countries (€278 million in 2010). The EU exports some poultry meat preparations to the countries but there are no reciprocal exports to the EU.

Southern Mediterranean countries

While the Union for the Mediterranean is the main regional forum, EU-Southern Mediterranean relations at bilateral level are managed mainly through the Euro-Mediterranean Association Agreements. In December 2011 the EU Foreign Affairs Council decided to authorise the opening of trade negotiations with Egypt, Jordan, Morocco and Tunisia as soon as the necessary preparatory process is completed. The negotiators are following the same track as in the case of Georgia and Moldova agreement.

Further Reading You can view the previous article from this AVEC report by clicking here.

November 2012