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

Author

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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.

Suggested Citation

  • Christophe Charlier, 2012. "Distrust and Barriers to International Trade in Food Products: An Analysis of the US — Poultry Dispute," GREDEG Working Papers 2012-02, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis, revised Nov 2013.
  • Handle: RePEc:gre:wpaper:2012-02
    as

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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2012-02.pdf
    File Function: Revised version, 2013
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    References listed on IDEAS

    as
    1. Lorenz, Edward, 1999. "Trust, Contract and Economic Cooperation," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 301-315, May.
    2. 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.
    3. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
    4. Frank H. Fuller & John C. Beghin & Stephane De Cara & Jacinto F. Fabiosa & Cheng Fang & Holger Matthey, 2001. "China's Accession to the WTO: What Is at Stake for Agricultural Markets?," Food and Agricultural Policy Research Institute (FAPRI) Publications 01-wp276, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    5. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    6. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    7. Horn, Henrik & Mavroidis, Petros C., 2001. "Economic and legal aspects of the Most-Favored-Nation clause," European Journal of Political Economy, Elsevier, vol. 17(2), pages 233-279, June.
    8. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-486, April.
    9. Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, University Library of Munich, Germany.
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    11. 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.
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    13. Bohnet, Iris & Frey, Bruno S. & Huck, Steffen, 2001. "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," American Political Science Review, Cambridge University Press, vol. 95(01), pages 131-144, March.
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    Cited by:

    1. Duy Vu, 2018. "Reasons not to Exit? A Survey of the Effectiveness and Spillover Effects of International Investment Arbitration," GREDEG Working Papers 2018-35, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.

    More about this item

    Keywords

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

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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