Opinion: “Will the American Chicken Cross the Road”- Analysis of India’s Latest Non-compliance of the WTO Rules

Background

On October 14th, 2014 the WTO dispute panel ruled that India had violated the WTO rules by not allowing the US poultry and other farm products to be marketed in India due to unsubstantiated fears of bird flu.

While India argued that its action were backed by international laws on animal health, the panel didn't find any merit in the arguments and it agreed with the US that Indian actions were discriminatory in nature and were based on insufficient scientific evidence.

India further argued that several measures of Indian laws viz. Indian Livestock Act, 1898 and a number of other orders which are issued by department of animal husbandry of Government of Indiawould be violated if the US poultry products are allowed in India

On the other hand, US argued that by imposing the ban India acted inconsistently with inter alia Article 2 (because the measures were arbitrarily and unjustifiably discriminate between members where identical conditions prevail and are applied in a manner which constitutes a disguised restriction on international trade), Article 3 (because the measures were not based on relevant international standard) ,Article 5 (because they were not based on a scientific risk assessment and that the measures were more trade restrictive than required to achieve India's appropriate level of protection) of the SPS(Sanitary and Phyto-Sanitary) agreement. SPS recognizes the right of the member states to make regulations to protect human, animal or plant health or life and also ensure at the same time that regulations must not be veiled form of protectionism.

In response India argued that its measures conformed to the international standard pursuant to Article 3.2 of the SPS agreement. Moreover it was argued that India was not obligated to provide scientific risk assessment report as its measure were based on scientific principles.

Analysis

This case did manage to stir up the debate about whether India used this ban as a thinly veiled protectionism and hence a political bargaining chip.The fact that the other developing nations like China, Argentina, Brazil, Colombia, Vietnam etc. became third parties in the case brings to the fore one question: Do import bans by developing countries against the products from developed countries reflect the succumbing to domestic political pressures or something more.

This judgment puts the policy ball clearly in India's court as it remains to be seen how India responds to such arguments. Either it can change the measures to comply with the WTO rules within a reasonable period of time or it has the option to appeal in 60 days under the WTO rules.