GENEVA – The Obama administration received its first rebuke from the World Trade Organization on Wednesday as a three-member panel declared that an American ban on Chinese poultry is illegal.

The ruling came as the U.S. House of Representatives prepared a vote condemning Chinese currency manipulation and threatening possible trade penalties. But its negative outcome for Washington could bolster Beijing’s claims that U.S. lawmakers are bending to protectionist pressure amid high unemployment.

The WTO said the U.S. was violating a number of its trade obligations by preventing Chinese chicken parts from entering the U.S. market, ruling against a measure in last year’s U.S. federal spending bill.

The law extended a five-year U.S. ban on Chinese chicken declared after a 2004 outbreak of bird flu.

The WTO can authorize sanctions against countries failing to comply with trade rules, but that can take years of litigation.

The Office of the U.S. Trade Representative acknowledged the defeat but said the restrictions were soon expiring and would be replaced by better conditions for Chinese poultry.

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Beijing and Washington banned each others’ poultry in 2004 following an outbreak of bird flu. But China lifted the ban after a few months and has imported more than 4 million tons of U.S. poultry since 2004. The U.S. refuses to do the same.

The U.S., the world’s largest importer, and China, the biggest exporter, also are arguing over regulations affecting commerce in steel, tires, patents and Hollywood films.

China’s exports have surged since joining the WTO in 2001, rankling manufacturers in the U.S. and Europe. Critics say China’s rise as a trade juggernaut has been aided by unfair policies that boost sales of Chinese goods abroad while limiting the amount of foreign products entering the Chinese market.

 


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