China states that Section 727 of the Omnibus Appropriations Act 2009, that combines bills funding the operations of many US government departments into a single appropriation bill, has violated the rules laid down by the world trade body, reports an official source.

According to Section 727, 'None of the funds made available in this Act may be used to establish or implement a rule allowing poultry products from China to be imported into the US'. In February, the US House of Representatives passed the $410-billion spending bill that would fund the federal government until September this year. US President, Barack Obama, signed the appropriation bill into law on 11 March.

"The section is actually saying No to – and hurting – China's poultry exports. It is obviously discriminatory and a protectionist action, and is not in line with the principles of the Most-Favored-Nation treatment and general elimination of quantitative restrictions under the WTO," a spokesperson for the Ministry of Commerce (MOFCOM) said. "We have to stand up to protect China's rights (as a member of the WTO) from being infringed."

Under WTO rules, the US must submit a reply agreeing to negotiate with China within 10 days of the appeal, failing which the latter has the right to ask for the establishment of a dispute settlement panel to investigate the issue. If the dispute cannot be settled within 60 days, China could also appeal to the expert panel, which will have to submit its report to the WTO within six to nine months.

"We expect that the US will provide a reasonable explanation, and promise that such restrictions would no longer be put in place," a MOFCOM source said.