Dispute
Panel Establishes China Compliance TRQ Ruling on Wheat, Rice and Maize Imports
At
the meeting of the Dispute Settlement Body (DSB) on 30 August, WTO members agreed
to the establishment of a dispute panel at the request of China to determine whether
China complied with an earlier WTO ruling regarding the administration of its tariff
rate quotas (TRQs), including those for wheat, rice, and corn.
China
submitted its second request for a dispute panel to determine whether it has complied
with a 2019 ruling concerning its administration of TRQs for certain agricultural
products. The DSB agreed to the establishment of the panel. China's first request
was blocked at the 26 July meeting of the DSB.
China
reiterated that it has fully implemented the rulings and recommendations of the
DSB in this dispute and that, while it was reluctant to request the establishment
of a compliance panel, it is doing so as a consequence of the United States decision
to request authorization to suspend concessions or other obligations with respect
to China under Article 22.2 of the Dispute Settlement Understanding. China said
it was deeply concerned about the systemic implications of the US approach and emphasized
that, despite its request for a compliance panel, the burden to prove the WTO-inconsistency
of China's compliance measures remains with the US.
The United
States said it does not agree that China has complied with the WTO ruling. It noted
that there is a lack of transparency and fairness in China's administration of TRQ
measures. The US further said that it has paused the arbitration of its request
to suspend concessions to China. The US said it is willing to work with China to
reach a resolution.
The DSB
agreed to the establishment of a panel. Australia, Brazil, Canada, the European
Union, Guatemala, India, Japan, the Russian Federation, Chinese Taipei, and the
United Kingdom reserved their rights to participate as third parties in the proceedings.
Costa
Rica submitted its first request for the establishment of a dispute panel to examine
measures imposed by the Panama on imports originating in Costa Rica including dairy
products, meat products, fish food, strawberries, pineapple, plantains, and bananas.
Costa Rica requested consultations with Panama on the matter in January 2021 but
failed to settle the dispute.
Costa
Rica noted its commitments to the multilateral trading system and said it has enjoyed
long and prosperous trade relations with Panama. Costa Rica acknowledged Panamanian
authorities' willingness for constructive dialogue but noted that situations may
arise where impartial views are required, particularly that of a dispute panel.
Costa Rica said Panama's decision to ban certain Costa Rican imports over the last
two years lacks scientific evidence or justification.
Panama
said it regrets Costa Rica's request despite efforts from both countries to maintain
the flow of agricultural goods while at the same time applying appropriate levels
of sanitary and phytosanitary standards. Panama said that
if this issue was brought to dispute settlement proceedings, it would entail much
time and resources from both parties and therefore it was better to object to Costa
Rica's panel request and continue discussions to find a solution.
The DSB agreed to revert to the
matter at a future meeting if requested by a member.
Japan
submitted its first request for the establishment of a dispute panel to examine
anti-dumping measures imposed by the China on stainless steel products from Japan.
Japan requested consultations with China on the matter in June 2021 but failed to
resolve their differences.
Japan
said China's price effect analysis was flawed because it treated three different
products (slabs, coils and plates) as a single product and did not properly analyze
the impact of each on domestic prices. Japan said China cumulatively assessed the
impact of imports from four WTO members that were not in a competitive relationship
with each other and is thus inconsistent with the Anti-Dumping Agreement. China's
assessment was insufficient to demonstrate the causal relationship between the imports
and the injury to domestic industry, Japan said.
China
said its anti-dumping regime is in line with relevant WTO rules. China said it was
not in the position to support Japan's request and that it believed it was premature
to establish a panel in this dispute.
The DSB agreed to revert to the
matter at a future meeting if requested by a member.
Tunisia
noted that the panel report for the dispute was circulated to members on 27 July
2021 and that Morocco notified its decision to appeal the report. However, Morocco
did not make an appellant's submission on the same day contrary to working procedures
and in turn, Tunisia is of the view it is not in a position to respond. Tunisia
further stated that, based on its reading of procedures, the suspension of the adoption
of the panel report should be lifted on 27 October and that Tunisia would be entitled
to request the DSB to adopt the report at its 29 November meeting. Until then, Tunisia
said it will do everything possible to try to resolve the dispute. It requested
the chair to convene the parties as quickly as possible to try to reach an agreement
either on the substance of the dispute or on an ad hoc appeal procedure under
the chair's guidance.
Morocco
said it remained open to continuing consultations including with the Secretariat
or the DSB chair to resolve the situation. Morocco also affirmed its notice of appeal
and reserved its right to respond to Tunisia's statements at the next DSB meeting.
The Russian
Federation and Canada reiterated statements expressing concern over some members'
decision to appeal panel reports when the appellate body is not functioning and
called on members to engage with a good faith effort to resolve disputes.
The chair
of the DSB, Ambassador Didier Chambovey of Switzerland,
noting Morocco's agreement to a procedure involving him, invited the parties to
begin consultations as soon as possible.
The European
Union reiterated its request that the United States cease transferring anti-dumping
and countervailing duties to the US domestic industry, arguing that every such disbursement
was a clear act of non-compliance with the rulings on this matter. The United States
said it has taken all actions necessary to implement the ruling and that, once a
member has said it has complied with a ruling, that member should no longer be required
to submit status reports on implementation.
The United
States said it placed this item on the agenda of the DSB meeting to highlight that
the EU has once again not provided WTO members with a status report concerning the
dispute. It noted that on June 15, the US and the EU reached an “Understanding on a cooperative framework for Large Civil Aircraft” which,
among other things, suspends the retaliatory tariffs related to this dispute for
five years, sets clear principles that any financing for the production or development
of large civil aircraft will be on market terms, and commits the two sides to joint
collaboration to address non-market practices in this sector. The European Union
said it welcomed the fact that the parties in this dispute have now reached an understanding
on a cooperative framework for large civil aircraft, and that this has allowed the
parties to suspend their respective retaliation measures for a period of five years.
The EU considers that it is not required to submit an implementation status reports
to the DSB.
The United
States presented status reports with regard to DS184, “US
— Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan”, DS160, “United
States — Section 110(5) of US Copyright Act”, DS464, “United
States — Anti-Dumping and Countervailing Measures on Large Residential Washers from
Korea”, and DS471, “United
States — Certain Methodologies and their Application to Anti-Dumping Proceedings
Involving China.” The European Union presented a status report with regard to DS291, “EC
— Measures Affecting the Approval and Marketing of Biotech Products.” Indonesia
presented its status reports in DS477 and
DS478, “Indonesia
— Importation of Horticultural Products, Animals and Animal Products.”