AVIAN FLU OUTBREAK SPURS TRADE DISPUTE WITH HAITI

C O N F I D E N T I A L SANTO DOMINGO 000174 SIPDIS SIPDIS STATE FOR WHA/CAR AND WHA/EPSC E.O. 12958: DECL: 01/30/2018 TAGS: KFLU EAGR SENV ECON ETRD PGOV HA DR SUBJECT: AVIAN FLU OUTBREAK SPURS TRADE DISPUTE WITH HAITI REF: A. SD 0047 ¶B. PORT AU PRINCE 00144 Classified By: Ambassador P. Robert Fannin, Reasons 1.4 (b) and (d) ¶1. (C) Summary. The Dominican poultry industry is claiming that it is suffering significant financial losses as a result of the decision by the Haitian government to ban all chicken and egg imports from the Dominican Republic on January 4. The decision to ban imports was the result of an occurrence of low pathogenic avian influenza (H5N2 strain) in the Dominican Republic in late December 2007, and has been justified by the Haitian government as necessary to protect public health and safety as well as the welfare of its small holder poultry sector. The Haitian government is recommending as mitigating measures that the Dominican authorities follow the World Organization of Animal Health (OIE) guidelines. These guidelines allow for trade from areas that have been deemed to be secure from the disease conditions. However, the GODR has not shown any willingness to devote the necessary financial and technical resources to implement the OIE guidelines. End Summary. ¶2. (U) Haiti banned Dominican poultry and eggs on January 4 following a late December incidence of low pathogenic avian influenza. Haiti is the Dominican Republic,s largest export market for poultry (fresh/frozen) and eggs (table), accounting for approximately USD 7 ) 10 million (source: unofficial GODR statistics). Haiti is the sole export market for Dominican table eggs. The ban is estimated to have already cost Dominican producers roughly USD 1.8 million in lost sales, although reliable figures are difficult to ascertain. Haiti,s consumers represent 20 percent of the Dominican egg market and the border closing has created a supply glut of nearly 30 million table eggs to date. Average egg prices have dropped over the last thirty days from USD 0.053 cents per unit to USD 0.039 cents per unit, an almost thirty percent decrease. The poultry industry is less dependent on Haiti. An industry export estimate puts losses at approximately 150,000 birds per month, representing less than two percent of the total monthly production of between 11 and 14 million birds per month. Oversupply of poultry has depressed prices in the Dominican Republic about 15 percent in the past 30 days. ¶3. (C) While the Dominican government can be commended for reporting the disease in a timely manner, the Ministry of Agriculture has not allocated sufficient resources (funds and staff) to quickly manage this incident. According to the APHIS official at Post, the Haitian government has recommended that the GODR follow the OIE guidelines which provide the procedure for a government to show that an area/country is secure from a disease. However, the DR has so far been unwilling to take the necessary actions to implement these guidelines despite several years of collaboration and financial support from the USDA, the International Development Bank, and the French government to upgrade the Dominican,s official government animal health laboratory and GODR surveillance ability. Comment: Although the Minister of Agriculture announced on January 31 that the GODR has invited a technical expert from OIE to visit the DR, we do not believe that this signals a change in policy. The DR sent the Minister of Agriculture to Haiti this week to meet with President Preval in order to push for an end to the ban and will continue to apply political pressure rather than address the technical issues that need to be implemented. ¶4. (U) According to press reports, the GODR is seeking additional export markets for the country,s poultry products and has approached the Venezuelan and Cuban governments in an attempt to offload excess supply, even if at a reduced price. The Dominican government is also considering providing support to the industry with a direct government purchase of poultry and eggs. The Embassy has not been able to confirm the status of either of these programs. ¶5. (U) It does not appear that the poultry and egg ban has negatively impacted other trade across the border yet. A Dominican border immigration official told PolOff that despite the ban other border commerce appears to be operating normally. Haitians have even been reported to be crossing the border to purchase poultry and eggs and bring them back across the border for consumption, although there doesn,t appear to be any large scale smuggling. However, a group of industry association leaders in the border city of Dajabon has called for a boycott of all Haitian products on market day as early as February 4 in retaliation for the ban. Radio and television commentators have been lambasting the Haitian government and calling for retaliatory measures, including national trade sanctions and even mass deportations of Haitians living in the Dominican Republic, which estimates put at roughly one million. There has been no word from the Dominican government concerning possible countermeasures. ¶6. (C) Comment: While it is in the best interest of the Dominican Republic to resolve this issue as quickly as possible, the GODR does not have the political will to address the underlying problems in the industry. Instead, the GODR is using the media and high level government visits to pressure the Haitian government to end the ban. It doesn,t hurt that it is good politics here to &bash8 Haiti, especially during a presidential election year. FANNIN