China loses most of WTO poultry challenge, scores small win over EU

GENEVA (Reuters) - China lost the bulk of a legal challenge against European Union poultry tariff quotas on Tuesday, when a World Trade Organization dispute panel upheld only two small parts of its complaint, both regarding food containing processed duck.

China went to the WTO in 2015 to contest the EU's decision to change its poultry import quotas in 2006 and 2009. In both cases it did not consult China, regarding it as too small a supplier to the EU market, and allocated most of the quotas to Brazil and Thailand.

The WTO panel said China's exports of the duck products had been artificially reduced by health concerns until July 2008, which the EU should have taken into account. But it rejected 13 other Chinese arguments.

In a statement posted on the website of China's Ministry of Commerce late on Tuesday, the ministry welcomed the decision on its duck products but said it regretted the panel's rejection on tariff quotas regarding China's exports of chicken meat.

"China urges the European Union to respect WTO's ruling and rectify the wrong practices on duck products quotas as soon as possible," the statement said, adding that China has in recent years invested 2.8 billion yuan (£328 million) on poultry farm equipment to supply the European market.

Either side can appeal the ruling.

(Reporting by Tom Miles; Additional reporting by Chen Aizhu in Beijing; Editing by Richard Pullin)