Representatives of the American Sheep Industry Association (ASI), which represents nearly 67,000 U.S. sheep farmers and ranchers, May 2 criticized a decision by the World Trade Organization's (WTO) Appellate Body overturning a 1999 decision by the U.S. International Trade Commission (ITC) that prompted the United States to impose import restraints on lamb meat imports.

The Appellate Body issued its report in connection with the challenge by Australia and New Zealand of the United States' July 1999 safeguard measure on imports of lamb meat. The safeguard measure consists of a three-year program of import restraints in the form of a tariff-rate quota and a program of financial assistance to the lamb meat industry.

In December 2000, a WTO Dispute Settlement Panel held that the safeguard action violated various provisions of the General Agreement and Tariffs and Trade and the WTO Safeguards Agreements. The Appellate Body's report largely upholds the Panel's decision.

Cindy Siddoway, an Idaho-based sheep producer and president of ASI, the principal petitioner in the U.S. safeguard action, expressed criticism regarding the Appellate Body's decision.

"Frankly, we are a bit shocked at the decision, as the Panel's decision back in December was so fundamentally off-base that we fully expected the Appellate Body to reverse them. We didn't necessarily expect a victory on all counts, but we certainly thought that the Appellate Body would correct some of the Panel's more egregious errors," Siddoway said.

In light of her own background and ASI's representation of the country's tens of thousands of individual sheep growers and feeders, Siddoway was particularly critical of the Appellate Body affirming the Panel's conclusion that the U.S. International Trade Commission was wrong to consider lamb growers and feeders as part of the domestic industry injured by surging lamb meat imports.

"The Panel and now the Appellate Body have said that the only U.S. industry producing lamb meat--and the only proper petitioners in a safeguard action--are the few dozen firms that actually slaughter live lambs and process the carcasses," Siddoway said.

"That's essentially telling the roughly 68,000 individuals, families and companies that raise live lambs in the United States that they have absolutely no remedy under the Safeguards Agreement if a flood of imported lamb meat comes into the U.S. market and ruins demand and prices for slaughter lambs."

Siddoway noted that the ITC found that growers and feeders contribute 88% of the value of lamb meat.

"To say that growers and feeders of live lambs are not part of the lamb meat industry is just preposterous, and ignores basic economic reality. As we have said to the ITC, growers and feeders are not just part of the domestic industry--they are really the heart of it," Siddoway said.

ASI and its attorneys are still studying the 72-page decision, but believe at this juncture that the ITC should be able to correct those elements of its determination that the Appellate Body found to be in error.

During the review process, current lamb import restrictions will remain in place.

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