Voluntary Report - public distribution

**Date:** 6/16/2005

**GAIN Report Number:** E35113

E35113

**EU-25**

**Poultry and Products**

**WTO rules against EU in salted poultry case**

**2005**

**Approved by:**

![](media/image1.wmf)Norval E. Francis

U.S. Mission to the EU

**Prepared by:**

Yvan Polet

**Report Highlights:**

On May 30, 2005, the WTO panel issued its rulings against the EU in the
complaints by Brazil and Thailand on the Customs Classification of
Frozen Boneless Chicken Cuts" (DS269 and DS286). In 2002, the EC, in
Regulation 1223/2002, stipulated that boneless chicken cuts, which were
slightly salted, were still to be considered as fresh, chilled or frozen
poultry meat under the customs code 0207 and not under customs code
0210. The EC issued this Regulation to close the loophole, under which
Brazil and Thailand were exporting poultry cuts at the much lower
customs tariff for heading 0210.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Brussels USEU \[BE2\]

\[E3\]

On May 30, 2005, the WTO panel issued the reports on the complaints by
Brazil and Thailand against "European Communities --- Customs
Classification of Frozen Boneless Chicken Cuts" (DS269 and DS286)[^1].
Brazil and Thailand filed their complaints after the European Commission
(EC) issued [Regulation
1223/2002[^2]](http://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_179/l_17920020709en00080009.pdf)
in 2002, and [Decision
2003/97/EC[^3]](http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_036/l_03620030212en00400043.pdf)
in 2003. The EC adopted these pieces of legislation to prevent Brazil
and Thailand from continuing to export salted poultry cuts to Europe
under customs heading 0210, which only has a 15.4 percent at valorem
tariff, instead of under customs heading 0207 for fresh, chilled and
frozen poultry meat, which has a €102.4/100 kg tariff. In this
legislation, the EC argued that this salted poultry meat had to be
imported under the 0207 heading because it needs to remain frozen for
conservation and therefore didn't fit the 0210 heading. Poultry imports
from Brazil/Thailand had soared through this "loophole" from 3 thousand
MT in 1996 to 400 thousand MT in 2001.

If the WTO Dispute Settlement Board (DSB) confirms the panel
conclusions, which stipulate that the EU "acted inconsistently with
requirements of the GATT 1994", it is expected that the EU will be
forced to let poultry exports from Brazil and Thailand in again. The
[Association of Poultry Processors and Poultry Trade in the EU
countries](http://www.avec.dk/) (AVEC) in a statement called upon the EC
to fight this verdict by all means because their assessment is that, if
the EC fails to do so, more than half a million of employees in the
sector could be unemployed. Reportedly, not only the European poultry
sector would be hard hit, but also the European wheat and corn producers
as poultry production uses about 20 percent of the European wheat and
corn production.

If Brazil and Thailand can export large quantities of poultry cuts to
the EU under the customs heading 0210 again, this will significantly
increase competition for potential future U.S. exporters of poultry to
the EU.

**Visit our website:** our website
**[www.useu.be/agri/usda.html]{.underline}** provides a broad range of
useful information on EU import rules and food laws and allows easy
access to USEU reports, trade information and other practical
information. More information on food safety can be found at
http://www.useu.be/agri/foodsafe.html. E-mail:
AgUSEUBrussels@fas.usda.gov

**Related reports from USEU Brussels:**

  -------------- ------------------------------------------- -------------
  **Report       **Title**                                   **Date
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  E35108         The EC proposes the legislation for its new 06/14/05
                 Broiler Welfare Directive                   

  E35065         Abolition of battery cages to cost €354     04/01/05
                 million to EU-25 egg producers              

  E35017         Poultry Semi-annual                         02/04/05
  -------------- ------------------------------------------- -------------

[^1]: <http://www.wto.org/english/news_e/news05_e/panelreport_269_286_e.htm>

[^2]: <http://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_179/l_17920020709en00080009.pdf>

[^3]: <http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_036/l_03620030212en00400043.pdf>