* Appropriations bill prevented imports of Chinese chicken

* Ban lifted, but still no imports

* China has since imposed duties on U.S. chicken

(Adds background, details, byline)

By Jonathan Lynn

GENEVA, July 27 (Reuters) - A World Trade Organization panel
has ruled in favour of China in its dispute with the United
States over an effective U.S. ban on imports of cooked Chinese
chicken, a Chinese source said on Tuesday.

The dispute, one of several political and economic
differences dogging U.S.-Chinese relations, originated, like
many trade rows, in health concerns -- in this case U.S.
nervousness about Chinese poultry following outbreaks of bird
flu in Asia.

Asked whether China had won the case, the source, who is
familiar with the ruling, told Reuters: "You could say that ...
It went well."

The dispute arose because of a spending bill passed by the
U.S. Congress that prevented the authorities from taking any
measures to process imports of Chinese chicken.

China said the measure was discriminatory and protectionist
because its poultry met international health standards and it
was exporting chicken to Europe and Japan.

Since the WTO agreed to set up the panel in July last year,
the Senate and House of Representatives -- under pressure from
U.S. meat producers fearing the loss of exports to China --
ended the ban on funding.

But the ban on imports remains effectively in place as the
U.S. Department of Agriculture is still reviewing Chinese food
safety rules before deciding whether it can start inspections at
Chinese processing plants.

China is now the third biggest market for U.S. farm goods,
but China has imposed duties that China imposed on U.S. chicken
products that it said were being dumped in the Chinese market or
unfairly subsidised.

The WTO issued a ruling in the dispute to the two parties on
Monday, but it remains confidential until it is published in a
couple of months time. There was no official comment from
Chinese or U.S. authorities.