Chicken Leg Dance

By Hansa Sinha

The world is obsessed with its favourite Chicken pieces it seems. Only last year there was a dispute in South Africa that specific EU countries are dumping frozen chicken pieces into South Africa causing material injury to the South African Poultry Association. The preliminary duties were duly imposed. South Africa has previously imposed similar measures for Brazil as well.

India today faces a WTO dispute of a similar nature. However, this dispute is not under the Antidumping agreement but under the SPS(Sanitary and Phytosanitary) Agreement. India had banned poultry products import citing it as a precautionary measure against the Avian Influenza as a reason in the year of 2007. In March 2012 US had gone to WTO and filed a complaint against this ban by India as it was argued to be very arbitrary, based on no scientific principles and against WTO principles. The WTO panel ruled in the favour of USA, while India has just recently appealed to the Appellate Body.

But it’s just chicken. How can it be such a big issue if the chicken is coming in ? And why is it so that the exporting countries are able to dump at such cheap prices ? Well it’s all about the choice of pieces !

In the EU- South Africa dispute, for instance there are cheap imports pertaining Bone-in portions. These portions include those chicken parts that are not popular in the EU but readily lapped up in the South African market. These maybe chicken parts like drumsticks, thighs and wings. In fact the boneless pieces such as breasts are not very popular in South Africa because of their higher prices. So while Europe munches on the juicy bits, it only finds it profitable and a wealth out of waste opportunity to sell the bone-in pieces in South Africa at throwaway prices. It is these low prices that in turn hurt the domestic producers.

Similarly, even in case of India although Avian Influenza has been cited as the reason, the panel is not completely satisfied. In fact the panel has found India’s measures to be inconsistent as they are beyond the extent necessary to protect human and animal health or life.   All of us undoubtedly are well aware of our love for the chicken legs. Well, these chicken legs are perceived to be having higher cholesterol levels and are therefore not popular and easily discarded by America. The poultry farmers in India are said to be afraid of the kind of dent these legs can put in its market share in the country.

As of today India has challenged the WTO ruling in favour of USA. With the most recent outbreak of high pathogenic avian flu in the United States going back to 2004, it would be interesting to see what report Appellate Body comes up with. Which of the two countries will be able to make the chicken legs dance to its tunes.

Read the entire panel report relating to India-USA dispute here

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