Colombia
Initiates Appeal Arbitration in Frozen Fries Dispute, Discloses Panel Report
Colombia has initiated
arbitration proceedings under Article 25 of the Dispute Settlement Understanding
(DSU) to review the findings of a WTO dispute panel in “Colombia — Anti-Dumping
Duties on Frozen Fries from Belgium, Germany and the Netherlands” (DS591). The notice
of appeal was circulated to WTO members on 10 October. In addition, Colombia and
the European Union, the complainant in the dispute, agreed to make public the panel
findings.
On 13 July 2020, Colombia and the EU notified the WTO Dispute Settlement Body (DSB) that they had agreed on procedures
for “arbitration under Article
25 of the DSU to decide
any appeal from any final report” issued to the parties in dispute DS591. Under
those agreed procedures, a party’s notice of recourse to arbitration under Article
25 is described as a “notice of appeal”.
The panel's final report was issued to the parties on
a confidential basis on 29 August 2022. On 12 September, Colombia asked the panel
to suspend its work, thus not circulating the report.
Agreeing to the parties' request, the dispute panel did
not circulate its final report, and instead transmitted it to the parties, who,
by agreement, made it public as part of Colombia's “notice of appeal”.
By resorting to an arbitration under Article 25 of the
DSU, Colombia has chosen to use a mechanism to appeal the panel’s findings through
an alternative means of dispute resolution foreseen by the DSU.
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.
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:
The dispute concerns anti-dumping measures
applied by Colombia on imports of potatoes, prepared or preserved (otherwise than
by vinegar or acetic acid), frozen, classified under tariff subheading 2004.10.00.00
(“frozen fries”) originating in Belgium, Germany, and the Netherlands.
With respect to the initiation of the investigation,
the Panel found that Colombia acted inconsistently with Article 5.3 of the Anti-Dumping
Agreement because the Colombian investigating authority (MINCIT) failed to examine
whether the use of third-country sales prices, instead of domestic sales prices,
for determining “normal value” as part of the initiation was “appropriate” in the
specific facts and circumstances of the underlying investigation. The Panel either
rejected or declined to consider the remainder of the European Union's claims under
Article 5.3 challenging MINCIT's decision to initiate the investigation.
As to the European Union's challenge against
the confidential
treatment of information by MINCIT, the Panel found that Colombia
acted inconsistently with Article 6.5 of the Anti-Dumping Agreement by granting
confidential treatment to certain information in the revised application. The Panel
also found that Colombia acted inconsistently with Article 6.5.1 of the Anti-Dumping
Agreement because, inter alia, it
failed to “require” the applicant to furnish non-confidential summaries of certain
information deemed to be confidential.
With respect to the European Union's claims
concerning MINCIT's alleged use of “facts available” for calculating margins
of dumping, the Panel found that Colombia acted inconsistently with its obligations
under Article 6.8 of the Anti-Dumping Agreement because MINCIT disregarded the export
prices that the investigated companies had provided in their questionnaire responses,
without determining that the conditions under Article 6.8 to resort to “facts available”
were satisfied. The Panel did not consider it necessary to address the European
Union's other claims challenging the use of facts available under paragraphs 3 and
6 of Annex II and Article 2.1 of the Anti-Dumping Agreement.
The Panel also concluded that Colombia acted
inconsistently with Article 2.4 of the Anti-Dumping Agreement because MINCIT improperly
denied certain exporters' requests for adjustments in the dumping
calculations.
As to claims focused on MINCIT's injury and causation
determinations, the Panel found that Colombia acted inconsistently with Articles
3.1, 3.2, 3.4, and 3.5 of the Anti-Dumping Agreement, because MINCIT included in
its injury and causation determinations imports from the exporters that were determined
to have final de minimis margins
of dumping and final negative margins of dumping. Given this, the Panel was not
called upon to make further findings on the other grounds presented by the European
Union in support of its claims challenging MINCIT's analysis of the “price effects”
under Articles 3.2 and 3.1; the impact on the domestic industry under Articles 3.4
and 3.1; and the causal link under Articles 3.5 and 3.1.