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Distrust and Barriers to International Trade in Food Products: An Analysis of the US — Poultry Dispute

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  • Christophe Charlier

Abstract

The US - Poultry dispute arbitrated by the WTO, opposing China to the US, was raised by the US decision to stop equivalence regime procedures for Chinese poultry. The Panel found that this decision was not compatible with the SPS Agreement's exigencies requiring a risk assessment centered on the Chinese poultry products, and contradicted MFN obligation of the GATT 1994 Agreement. The possibility that the reasoning of the Panel in this dispute was based on the reasoning developed in earlier SPS cases suggests that this dispute doesn't provide new perspectives for SPS cases. However, considering the dispute in the context of a trust game, this paper argues that the US - Poultry case is original. It provides an interpretation showing that a risk assessment focusing on the social and institutional conditions of the implementation of a country's safety regulation should be considered a proper way to defend impeding a national equivalence regime. This conclusion is reinforced by the economic analysis of MFN treatment in the dispute.

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File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2012-02.pdf
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Bibliographic Info

Paper provided by Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2012-02.

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Length: 21 pages
Date of creation: Jan 2012
Date of revision: Nov 2013
Handle: RePEc:gre:wpaper:2012-02

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Related research

Keywords: WTO; SPS Agreement; MFN; Non-tariff Barrier to trade; Product safety; China.;

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References

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  1. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-86, April.
  2. Fuller, Frank H. & Beghin, John C. & Fabiosa, Jacinto F. & Fang, Cheng & Matthey, Holger & DeCara, Stephane, 2003. "China's Accession to the WTO: What is at Stake for Agricultural Markets?," Staff General Research Papers 2085, Iowa State University, Department of Economics.
  3. Christophe Charlier & Michel Rainelli, 2002. "Hormones, Risk Management, Precaution and Protectionism: An Analysis of the Dispute on Hormone-Treated Beef between the European Union and the United States," European Journal of Law and Economics, Springer, vol. 14(2), pages 83-97, September.
  4. Shumei Chen, 2010. "A transatlantic comparison on poultry disputes with China: A case study of murky protectionism," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 3(2), pages 169-184, June.
  5. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Trust in Large Organizations," NBER Working Papers 5864, National Bureau of Economic Research, Inc.
  6. Lorenz, Edward, 1999. "Trust, Contract and Economic Cooperation," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 301-15, May.
  7. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
  8. Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, EconWPA.
  9. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
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