Arbitration
Panel Over Rules Panel Ruling against Columbia Anti-dumping Duty in Frozen
Fries
·
First Arbitration Proceeding based on the Multi-Party Interim
Appeal Arbitration Arrangement (MPIA)
On 21 December
the WTO circulated the arbitration award in the proceedings initiated by Colombia
under Article 25 of the Dispute Settlement Understanding to review the findings
of a WTO dispute panel in “Colombia — Anti-Dumping Duties on Frozen Fries from Belgium,
Germany and the Netherlands” (DS591).
This is the first arbitration proceeding
based on the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) to which
both Colombia and the European Union are participants.
The summary below was up-to-date at 21 December 2022
Complaint by the European
Union
On 15
November 2019, the European Union requested consultations with Colombia regarding
the anti-dumping duties imposed by Colombia on imports of potatoes, prepared or
preserved (otherwise than by vinegar or acetic acid), frozen (frozen fries), originating
in Belgium, the Netherlands and Germany.
The
European Union claimed that the measures appear to be inconsistent with:
·
Articles
1, 2.1, 2.4, 2.4.1, 2.6, 3.1, 3.2, 3.4, 3.5, 3.6, 3.7, 3.8, 5.1, 5.3, 5.4, 5.8,
6.1.2, 6.2, 6.4, 6.5, 6.5.1, 6.8, 6.9, 9.1, 9.2, 9.3, 11.1, 12.2, 12.2.2, 18.1 and
paragraphs 3 and 6 of Annex II of the Anti-Dumping Agreement;
·
Article 10
of the Customs Valuation Agreement; and
·
Article VI
of the GATT 1994.
On 17 February 2020, the European Union requested the
establishment of a panel. At its meeting on 28 February and 5 March 2020, the DSB
deferred the establishment of a panel.
At its meeting on 29 June 2020, the DSB established a
panel. Brazil, China, Honduras, India, Japan, the Russian Federation, Türkiye and the United States reserved their third-party rights.
On 13 July 2020, the European Union and Colombia informed
the DSB that they had agreed to Procedures for Arbitration under Article 25 of the
DSU in this dispute (“Agreed Arbitration Procedures”). These procedures, which were
subsequently revised on 20 April 2021, were entered into by the parties “to give
effect to communication JOB/DSB/1/Add.12” (that is, the Multi-Party Interim Appeal
Arbitration Arrangement Pursuant To Article 25 Of The DSU (MPIA)) and “to decide
any appeal from any final panel report as issued to the parties in [this] dispute.”
Following the agreement of the parties, the panel was
composed on 24 August 2020.
On 31 March 2021, the Chair of the panel informed the
DSB that, taking into account the working procedures and the timetable prepared
in consultation with the parties, including the parties' requests for additional
time to prepare submissions, as well as certain procedural and logistical challenges
presented by the global COVID-19 pandemic the panel did not expect to issue its
final report to the parties before the fourth quarter of 2021.
On 29 August 2022, the Panel, having consulted with the
parties, adopted Additional Working Procedures to facilitate arbitration under Article
25 of the DSU (“Additional Working Procedures”). On the same day, the Panel issued
its Final Report to the parties and informed them that the Panel Report would be
circulated to Members, following translation, on 19 September 2022.
Subsequently, the Panel received a communication from
Colombia requesting the Panel to suspend its work in accordance with Article 12.12
of the DSU in order to facilitate arbitration under the Agreed Arbitration Procedures.
According to these procedures, Colombia's request constituted a joint request by
both parties. On 16 September 2022, the Panel granted the request effective the
same day, and determined not to circulate its final Report to Members unless it
was subsequently requested to resume its work within the time-period specified in
Article 12.12 of the DSU.
On 6 October 2022, Colombia filed a notice
of recourse to Article 25 under the Agreed Arbitration Procedures. This notice,
which the parties refer to as a “Notice of Appeal”, was circulated to the DSB on
10 October 2022. It included the full text of the final Panel Report transmitted
by the Panel to the parties, third parties and the pool of arbitrators and, absent
circulation by the Panel to Members, thereby made the Report public.
The following is a summary of the Panel Report
as included in Colombia's Notice of Appeal:
On 12 October 2022, Members were informed of the Arbitrators
selected for this dispute and the election of the Chairperson (WT/DS591/8).
On 15 November 2022, the hearing in this Arbitration was
held. Pursuant to procedures adopted by the Arbitrators for partial public viewing
of the hearing, opening statements were video recorded for parties and third parties
that waived the confidentiality of their statements.
The final
Award was issued to the parties in English on 19 December 2022. On 21 December 2022,
the Award in three working languages of the WTO was notified to the DSB, the Council
for Trade in Goods, and the Committee on Anti-Dumping Practices and circulated to
Members. Both the issuance and notification of the Award are within the 90‑day
deadline set out in the MPIA, which would have fallen on 4 January 2023.
On 12 October 2022, Members were informed of the Arbitrators
selected for this dispute and the election of the Chairperson (WT/DS591/8).
On 15 November 2022, the hearing in this Arbitration was
held. Pursuant to procedures adopted by the Arbitrators for partial public viewing
of the hearing, opening statements were video recorded for parties and third parties
that waived the confidentiality of their statements. T
The final Award was issued to the parties
in English on 19 December 2022. On 21 December 2022, the Award in three working
languages of the WTO was notified to the DSB, the Council for Trade in Goods, and
the Committee on Anti-Dumping Practices and circulated to Members. Both the issuance
and notification of the Award are within the 90‑day deadline set out in the
MPIA, which would have fallen on 4 January 2023.
Colombia challenged four findings of inconsistency by
the Panel. With respect to the initiation of investigation, the Arbitrators
agreed with the Panel that Colombia's interpretation of the phrase “where appropriate”
in Article 5.2(iii) was not “permissible” within the meaning of Article 17.6(ii),
but considered that the Panel applied the legal standard in an overly stringent
manner. The Arbitrators considered that an unbiased and objective authority could
have found the use of third-country sales prices in the application at issue to
be “sufficient” to initiate the investigation. The Arbitrators therefore reversed
the Panel's finding and found that the European Union had not established that Colombia
acted inconsistently with the obligation under Article 5.3 of the Anti-Dumping Agreement
to determine the “sufficiency” of evidence to justify the initiation.
With respect to MINCIT's confidential treatment
of information, the Arbitrators found that the information at issue
was “provided on a confidential basis” by the applicant and “treated” by MINCIT
as confidential. The Arbitrators therefore upheld the Panel's finding that, given
the lack of a showing of “good cause” for the confidential treatment, MINCIT acted
in a manner inconsistent with Article 6.5 of the Anti-Dumping Agreement.
With respect to exporters' requests for adjustment,
the Arbitrators disagreed with Colombia that part of the European Union's “packaging
cost-related claim” under Article 2.4 fell outside the Panel's terms of reference
because it was not identified in the panel request. Rather, the Arbitrators considered
that the allegation at issue concerned factual details that led to Colombia's failure
to perform a fair comparison and need not be spelt out in the panel request. The
Arbitrators therefore upheld the Panel's finding that the claim fell within its
terms of reference.
With respect to MINCIT's injury and causation
determinations, Colombia contended that the term “dumped imports”
in Article 3 refers to any imports for which an authority calculates a positive
dumping margin, including de minimis margins (i.e. less than 2 %). The Arbitrators
considered that such an interpretation would render ineffective the requirement
under Article 5.8 to immediately terminate an investigation where an authority determines
a de minimis
dumping margin, and was not supported by other arguments based on context and negotiating
history. The Arbitrators concluded that Colombia's interpretation was not “permissible”
within the meaning of Article 17.6(ii), and upheld the Panel's finding that Colombia
acted inconsistently with Articles 3.1, 3.2, 3.4 and 3.5 of the Anti-Dumping Agreement.