A transatlantic comparison on poultry disputes with China. A case study of murky protectionism
| DOI | https://doi.org/10.1108/17544401011052294 |
| Pages | 169-184 |
| Published date | 22 June 2010 |
| Date | 22 June 2010 |
| Author | Shumei Chen |
| Subject Matter | Economics |
Poultry
disputes with
China
169
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 3 No. 2, 2010
pp. 169-184
#Emerald Group Publishing Limited
1754-4408
DOI 10.1108/17544401011052294
A transatlantic comparison on
poultry disputes with China
A case study of murky protectionism
Shumei Chen
School of Economics & Management, Southeast University,
Nanjing, People’s Republic of China
Abstract
Purpose – The purpose of this paper is to conduct a comparative study on the transatlantic
similarities and dissimilarities in the USA’sand the EU’s poultry trade disputes with China, as a case
study of murky protectionism amid the current global financial crisis.
Design/methodology/approach – The case history is explored chronologically, supported with
relevant legal documents. For comparative purposes, the poultry trade profiles concerning these trade
partners are overviewed before the case study.
Findings – The paper concludes from the case study that there is a great deal of synchronicity
between the murky protectionism and the current global crisis within the current WTO framework,
due to both pressures faced by some governments from inside and the inherent limitations of the
WTO agreements and dispute settlement mechanism. Comparatively, the EU’s approach to poultry
dispute with China is more scientific, while the USA’s is more political.
Research limitations/implications – As the Sino-US poultry dispute is still outstanding, pending
for the panel’s report, the findings are interim, and the implications only tentative. In sho rt, the
lessons learnt from this comparative case study is that unilateral capacity building might be the only
concrete thing Chinese exporters and authorities can do at present stage under the current WTO legal
framework, amid the tidal wave of the current global crisis.
Originality/value – The paper examines trade disputes over the same commodity China involved
with two pivotal trade partners, in order to explore underlying differences; and lessons drawn for
China.
Keywords Protectionism, Poultry, Trade barriers, China, World economy
Paper type Case study
1. Introduction
Statistics show that trade is a major casualty of the current global financial crisis (The
WTO, 2009b, p. 1). As trade has been affected adversely by the crisis, protectionist
dangers are mounting. Although both the G-20 summit declarations in Washington, DC
(November 2008) and London (April 2009) pledged to avoid new protectionism, some
members violated the pledge before the ink was dry on the Washington, DC summit
declaration.Among these trade-impeding measuresdeployed by some governments thus
far, some are murky (Baldwin and Evenett, 2009, p. 4), instead of explicit or overt,
attempting at abusing such legitimate discretion as health and safety regulations. The
China-US tradedispute over poultry is such a case in point (WT/DS392).
Pursuant to the WTO’s dispute settlement procedure, it takes six months for the
panel to conclude. Meanwhile, short of the panel’s report, this artic lewi ll be confined to
the comparative study on different approaches taken by the EU and the USA to their
poultry disputes with China, as a case study of murky protectionism within the current
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1754-4408.htm
This article is part of the research results of The Chinese National Social Sciences Fund Project
(Project No. 08BGJ026). The author is very grateful to two anonymous referees for their
comments and suggestions.
JCEFTS
3,2
170
global financial crisis. After all, due to the limited time span of the current crisis and
protectionist responses triggered, a comparative case study seems to be ‘‘useful in the
preliminary stages of an investigation’’ (Abercrombie et al., 1994, p. 34).
In the rest of the article, murky protectionism will be pinpointed in the national and
international context of the current crisis, delving into its genesis from the
administrative protectionism inthe 1970s, followed by poultry trade profiles concerning
these three trade partners, namely, the USA, the EU and China. Then the approaches
taken by the EU and the USA towards the poultry dispute with China will be compared
in their casehistory before findings and implications are drawnin the final part.
2. Global crisis and murky protectionism
History provides many examples of how a bad domestic economy creates just the right
conditions for politicians to shut off imports in a misguided and desperate attempt
(Bown, 2009c, p. 30). For example, the Great Depression of the 1930s was marked by
protectionist trade policies and the breakdown of the multilateral trading system
(Eichengreen and Irwin, 2009, p. 1). Amid the worst economic recession since the Great
Depression, ‘‘the virus of protectionism, like the virus of swine flu (this is a direct
quotation, the original word is ‘‘fever’’?), is spreading fast through the global economy,
and taking new and more dangerous fo rms’’ (Howell, 2009): ‘‘buy local’’ conditions in
contracts, excessive health and safety rules, barriers to investment flows and ‘‘foreign’’
ownership, child-labour or forced-labour accusations, as well as carbon tariffs. The
total number of new import-restricting trade remedy investigations launched in 2008
was 29.1 per cent higher than that initiated during 2007 (Bown, 2009b, p. 2); while
compared to the same time period in 2008, the first half of 2009 saw a 30.5 per cent
increase in the imposition of new import-restricting measures upon completion of
earlier investigations initiated under these trade remedy laws (Bown, 2009c, p. 1). To be
relevant to ‘‘the challenge of ensuring that the channels of trade remain open in the face
of economic adversity’’ (The WTO, 2009b, p. xi), in its latest annual World Trade
Report, the WTO has chosen the topic of Trade Policy Commitments and Contingency
Measures, shifting its stance from earlier ‘‘significant slippage’’ to ‘‘qualify changes’’ in
protection, to ‘‘contingency protection’’ from late 2008 to July 2009 (The WTO, 2009a).
In short, the de pth and duration of the current global economic downturn will be a
major determinant of the potential dimens ions of protectionism (Ahearn, 2009, p. 2).
Meanwhile a fresh term ‘‘murky protectionism’’ has been employed to refer to this
contingency protection deployed by some governments, to mean ‘‘abuses of legitimate
discretion which are used to discriminate against foreign goods, comp anies, workers
and investors’’, such as ‘‘abuses of health and safety regulations, and clauses in
stimulus packages that confine spending to domestic producers’’ (Baldwin and
Evenett, 2009, p. 4). These non-tariff measures are similar to those taken in the 1970s
after the oil crisis under the term ‘‘administrative protectionism’’, which were defined to
cover measures ranging from protective regulations providing safeguards for the
consumer, to the use of regulatory measures such as veterinary, health, quarantine and
similar restrictions imposed for specific purposes (Quambusch, 1977, p. 80; Hillma n,
1978, pp. 492-3). Except for such latest measures as carbon tariffs, the current murky
protectionism cannot be called ‘‘new protectionism’’ at all, but ‘‘resurgence’’ of
administrative protectionism instead. Whatever nominal terms, there is no doubt that
the current global financial crisis has resurrected protectionism.
Following the rise of protectionist trend and the subsequent severe trade contraction
for the first time after World War II, trade tensions are increasing worldwide. As the
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