GENEVA, July 20 (Reuters) - The United States blocked on Monday the creation of a panel of judges at the World Trade Organisation sought by China to examine a U.S. ban on Chinese poultry imports that Beijing says breaks WTO rules.
The exchange at the WTO's dispute settlement body highlighted friction between the world's second biggest exporter and its biggest importer -- but also showed the two trading giants were working within the system to resolve differences.
China immediately called for an extra meeting of the dispute settlement body on July 31 to approve the panel -- which will be set up after that session.
But the row also shows how concerns about food safety can be entangled with worries about protectionism.
At the heart of the dispute is the U.S. Omnibus Appropriations Act for 2009, which specifies that none of its funds should be used to facilitate imports of Chinese poultry.
"While violating various WTO rules, the measure has severely undermined the stable development of Sino-U.S. trade on poultry products, and damaged the lawful rights and interests of China's poultry industry," China's WTO delegation said in a statement to the dispute body.
But the U.S. delegation said the United States allows imports of poultry from all countries with whom Washington has agreed to respect each other's health and safety standards, but China challenged with the way the United States was dealing with its request for such an agreement.
"The United States places great importance on ensuring that its measures relating to food safety are based on science and in compliance with U.S. obligations under the WTO Agreement," it said.
China launched the trade dispute in April. Under WTO procedures the defendant in a trade row can block a dispute panel once.
U.S. legislators wrote a ban on funding arrangements for Chinese poultry imports -- for instance setting up health checks at U.S. ports -- into the appropriations bill after a series of scandals about Chinese food and other products.
On July 9 the U.S. House of Representatives passed an agriculture funding bill that would extend the ban until September next year. [ID:nN09458552]
U.S. poultry producers support the Chinese position out of fear China could retaliate, blocking the biggest export market for the U.S. industry, worth almost $700 million a year. U.S. trade groups say China has already stopped letting in some U.S. chicken products.
In a similar case South Korea blocked the formation of a panel sought by Canada to investigate Seoul's ban on imports of Canadian beef, imposed after a series of cases of bovine spongiform encephalopathy (BSE), or "mad cow disease" in Canada. (Editing by Jon Boyle)Reuters
