Panels
Established to Review Indian Tech Tariffs, Japanese Export Restrictions, EU Palm
Oil Measures
Ø DS584:
India — Tariff Treatment on Certain
Goods
Ø DS588:
India — Tariff Treatment on Certain
Goods in the Information and Communications Technology Sector
Ø DS590:
Japan — Measures Related to the
Exportation of Products and Technology to Korea
Ø DS593:
European Union — Certain Measures
Concerning Palm Oil and Oil Palm Crop-based Biofuels
Ø DS595:
European Union — Safeguard Measures
on Certain Steel Products
Ø DS511:
China — Domestic Support for
Agricultural Producers
Ø DS234:
United States – Continued Dumping
and Subsidy Offset Act of 2000
Ø DS316:
European Communities and Certain Member
States – Measures Affecting Trade in Large Civil Aircraft: Implementations
of the Recommendations Adopted by the DSB
Ø Statement
by Qatar regarding the panel report
in DS567,
"Saudi Arabia — Measures
concerning the Protection of Intellectual Property Rights"
Ø DS371
Thailand – Customs and Fiscal
Measures on Cigarettes from the Philippines
Ø Appellate
Body appointments
Ø Surveillance
of implementation
WTO
members agreed on 29 July to the establishment of four new dispute panels to examine
various trade complaints. At a meeting of the Dispute Settlement Body (DSB), two
panels were established at the request of Japan and Chinese Taipei to examine India’s
tariffs on high tech goods. Panels were also established to review a Korean complaint
regarding Japan’s export licensing procedures for certain goods and Indonesia’s
complaint concerning EU measures affecting palm oil and oil palm crop-based biofuels.
Japan
submitted its second request for a panel regarding India's tariff treatment of certain
information and communications technology (ICT) goods. Japan’s first request was blocked at the DSB meeting
on 29 June. Japan
reiterated that India had raised customs duties on the products concerned in excess
of its bound rates set out in its WTO schedule of commitments. Japan asked that India agree to a single panel
to review its complaint and those of Chinese Taipei and the European Union since
they all relate to the same matter.
India
said it was deeply disappointed with the request of Japan, and reiterated that Japan's
complaint was essentially seeking to get India to take on commitments under the
expanded Information Technology Agreement (ITA-II) which it never signed on to,
and to take advantage of an error made by India when transposing its tariff lines
to the updated Harmonized System (HS) of tariffs. India also said it would not agree to the establishment
of a single panel to review the complaints of Japan, Chinese Taipei and the EU since
there were vast differences in the three complaints.
The EU,
which secured the establishment of a panel on its complaint at the 29 June DSB meeting,
said it supported the establishment of a single panel since all the complainants
identify the same tariff treatment of the ICT goods and are all based on the same
legal claims.
The DSB
agreed to the establishment of a panel. The EU, Chinese Taipei, the United States,
Turkey, the United Kingdom, Norway, Singapore, Thailand, Russia, Brazil, Korea,
China, Canada and Indonesia all reserved their third party rights to participate
in the proceedings.
Chinese
Taipei submitted its second request for a panel regarding the tariff treatment India
accords to certain ICT goods. Chinese Taipei’s
first request was blocked at the DSB meeting on 29 June. As with the EU and Japan,
Chinese Taipei said that India is applying tariffs on ITC goods lines in excess
of the bound rate set out in its WTO schedule of commitments, as well as applying
less favorable treatment to ICT products from Chinese Taipei. It joined the EU and
Japan in calling for the establishment of a single panel to rule on the three claims
in order to save on resources for all involved.
India
said it was disappointed with the request from Chinese Taipei, which seeks to impose
on India the elimination of tariffs on certain ICT goods which India never agreed
to and take advantage of an error made by India when transposing its tariff lines
to the updated HS system. India reiterated
that it could not agree to the establishment of a single panel to review the three
complaints.
The EU
and Chinese Taipei said they regretted India's refusal to agree to the establishment
of a single panel.
The DSB
agreed to the establishment of a panel. The EU, Japan, the United States, Turkey,
the United Kingdom, Norway, Singapore, Thailand, Russia, Brazil, Korea, China, Canada
and Indonesia all reserved their third party rights to participate in the proceedings.
Korea
presented its second request for the establishment of a dispute panel to rule on
Japan's amended export licensing policies and procedures imposing certain additional
requirements on exports of fluorinated polyimide, resist polymers, and hydrogen
fluoride, as well as their related technologies, destined for Korea. Korea's first
request was blocked at the DSB meeting on 29 June. Korea reiterated that exports of the products
in question were being seriously restricted because of Japan's amended export licensing
requirements and that Korea considered these requirements to be in violation of
WTO agreements covering trade in goods, services, trade-related investment measures
and protection of intellectual property rights.
Japan
said it was deeply disappointed with Korea's second request for a panel and said
the measures in question were in line with international practices regarding export
controls over dual-use items (those with civilian and military applications). Japan has and will continue to grant such licences for exports to Korea in line with the new requirements. Korean companies have not suffered any damage
as a result of the measures, yet Korea is challenging the fundamental premises underlying
the internationally-established framework for non-proliferation of arms and sensitive
military technologies, including weapons of mass destruction. Japan views dialogue as the best way of resolving
this matter rather than dispute settlement, it said.
The US
said only Japan can judge what is necessary to protect its essential security interests
and that since the erroneous panel findings in "Russia — Measures Concerning
Traffic in Transit" (DS512), several
WTO members have rushed to challenge national security measures. This surge in litigation
poses serious risks to the WTO, threatening to enmesh the organization in national
security matters it has wisely avoided for over 70 years.
The DSB
agreed to the establishment of a panel. The
United States, the United Kingdom, Turkey, Chinese Taipei, Norway, Singapore, Ukraine,
the EU, India, China, Brazil, Canada and Russia reserved their third party rights
to participate in the proceedings.
Indonesia
submitted its second request for a panel to examine certain measures adopted by
the European Union and EU member states affecting palm oil and oil palm crop-based
biofuels. Indonesia's first request was blocked at the DSB meeting on 29 June. Indonesia said the measures in question not only
unfairly discriminated against palm oil but were inconsistent with provisions in
the WTO's goods, subsidies and technical barriers to trade agreements.
The EU
said it was confident it would prevail in the dispute and said it was ready to discuss
reciprocal interim arrangements that would preserve the availability of appeal review
in this and other disputes on the basis of
Article
25 of the WTO's Dispute Settlement Understanding (DSU).
Malaysia
said it strongly believes the EU's measures constitute a simple prohibition on the
use of palm oil in the production of biofuels, creates unnecessary obstacles to
trade and is more trade restrictive than necessary.
The DSB
agreed to the establishment of a panel. The
United States, Malaysia, Norway, Turkey, Singapore, Thailand, Russia, Japan, Korea,
India, Honduras, Guatemala, Costa Rica, Colombia, China, Canada, Brazil and Argentina
reserved their third party rights to participate in the proceedings.
Turkey
submitted its first request for the establishment of a panel to rule on provisional
and definitive safeguard measures imposed by the European Union on imports of certain
steel products, as well as the investigation that led to the imposition of those
measures.
The definitive
safeguard measures were imposed on 26 out of the 28 product categories examined
and have since been reviewed several times, including recently through a regulation
published on 30 June. As a result of those reviews, the safeguard measures are even
more trade restrictive, Turkey said. The
EU did not make reasoned and adequate determinations regarding the products under
investigation, which it failed to define in a consistent manner throughout the investigation.
Turkey
said the EU also failed to make reasoned and adequate determinations regarding the
existence of unforeseen developments, the existence of an alleged threat of serious
injury to the domestic EU industry, the causal relationship between the increased
imports and the alleged threat of serious injury to the domestic industry, the exclusion
of certain countries from the safeguard with whom the EU has free trade agreements,
and the EU's reduced pace of liberalization of the definitive safeguard measures. As a result, the measures are clearly inconsistent
with WTO rules, Turkey said. Consultations with the EU regarding Turkey's claims
took place on 29 April but failed to resolve the dispute, prompting Turkey's request
for a panel.
The EU
said it regrets the consultations with Turkey failed to resolve differences between
the two and said it believes the safeguard is in line with WTO law. For this reason, the EU said it opposes the establishment
of a panel.
The DSB
agreed to revert to the matter should a requesting member wish to do so.
The United
States noted at the beginning of the meeting that China formally objected to the
US request for authorization to suspend trade concessions against China due to China's
non-compliance with the WTO ruling in DS511, as spelled out in a communication on 16 July. In line with WTO rules, the matter has automatically
been referred to arbitration and the US no longer proposed the matter be put on
the DSB agenda for consideration.
China
took note of the US request and said it disagreed with the US allegation that China
has failed to bring its measures into compliance with its WTO obligations. Any disagreement
on the consistency of its measures taken to comply with a WTO ruling must be resolved
in compliance proceedings under Article 21.5 of the DSU, before any level of suspension
of concessions can be assessed under Article 22 of the DSU, China added. In these circumstances, China objects to the level
of suspended concessions proposed by the United States.
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. Canada supported
the EU statement, while the United States said it has taken all actions necessary
to implement the ruling.
The United
States said that once again the European Union has failed to provide a status report
to the DSB concerning dispute DS316. The European Union repeated that the matter
is subject to new compliance proceedings and thus there was no obligation on the
EU to submit a status report.
The US
also noted the EU recently announced that France and Spain agreed with Airbus to
amend the terms of two launch aid financing packages found to be WTO-inconsistent,
and suggested this action now brought the EU into compliance with WTO rulings on
subsidies for Airbus. The EU however has
not provided any details of these supposed amendments to the WTO or the US, nor
has it addressed the remaining six WTO-inconsistent launch aid measures, the US
said.
Given
the limited measures covered by the announcement, and the lack of any details on
the supposed changes made, no one can take seriously that these changes actually
address the full scope of the WTO-inconsistent subsidies and bring a resolution
to this dispute, the US said. This contrasts
with US action in the EU's dispute case against Boeing (DS353), where
the US withdrew the sole measure found to cause adverse effects – the Washington State B&O tax rate
reduction. The text of the measure is public, and its terms were notified to the
WTO and the EU. The US said it was regrettable
that the EU continues to refuse to seriously address its massive, WTO-inconsistent
subsidies and therefore appears to want this dispute to continue.
The European
Union said it did not agree with the US assertion that it has fully implemented
the rulings in the Boeing dispute. While
the EU is still examining the impact of the legislative action concerning the Washington
State B&O tax, the rulings in that dispute cover a number of additional measures
where it said the US remains non-compliant, including NASA and Department of Defence Research and Development measures and certain state
and local measures, the EU said.
Qatar
made a statement calling on Saudi Arabia to remedy the matters the panel found fault
with in the DS567 panel ruling. As Saudi
Arabia has filed an appeal, and with the Appellate Body currently unable to hear
any appeals, this appeal "into the void" will in no way facilitate the
prompt settlement of this dispute.
Qatar
called on Saudi Arabia to explore alternative ways to submit the appeal to a mutually-agreed
adjudicator that is able to make binding decisions. Doing so would demonstrate that Saudi Arabia genuinely
seeks appellate review and is not in reality simply trying to delay the resolution
of this dispute. Qatar said it is confident
that any such review would only result in further confirmation that Saudi Arabia
has breached multiple obligations under the WTO's Agreement on Trade-Related Aspects
of Intellectual Property Rights (TRIPS), that such violations are not shielded by
the security exception under the TRIPS Agreement, and that settlement of this dispute
would require significant improvements in Saudi Arabia's protection of intellectual
property rights.
Saudi
Arabia underlined the current tense state of relations between Qatar and several
WTO members and said the panel affirmed that the severance of all relations with
Qatar was the ultimate state expression of the existence of an "emergency in
international relations" as set out under the national security exception of
the TRIPS Agreement, adding that this exception was justified where invoked by Saudi
Arabia. To be clear, Saudi Arabia has not
claimed that violation of intellectual property rights should be justified under
the security exception. Therefore, the panel
should not have ruled on whether the non-application of criminal procedures and
penalties by Saudi Arabia had satisfied the requirements for justification under
the security exception; this issue is currently under appeal.
Saudi
Arabia considers that its appeal of this issue is of particular systemic importance
in the context of this and other pending disputes. A WTO panel has no basis to ignore members' explicit
definition of their scope of invocation of WTO security exceptions, it said.
The United
States said national security matters are political in nature and were not matters
appropriate for adjudication under WTO dispute rules. Every WTO member has the authority to determine
for itself those matters that it considers necessary for the protection of its essential
security interests. In this case the panel
simply transposed the findings of the panel in DS512, which it said was a seriously
flawed ruling.
The United
Arab Emirates said it welcomed the panel's findings that an emergency in international
relations exists within the Gulf region.
The chair
of the DSB reported to members that consultations with the Philippines and Thailand
were still ongoing with regards to resolving their differences in a dispute over
the next steps in the DS371 proceedings.
Both
the Philippines and Thailand made statements which reiterated the positions outlined
at the last DSB meeting on 29 June. The Philippines
said it had presented constructive options to overcome the "void" caused
by the inability of the Appellate Body to review Thailand's compliance with earlier
rulings in the matter; Thailand has still not responded to the ideas contained in
that written communication, but the Philippines said it understands Thailand is
considering ideas on potential ways forward.
Thailand
said circumstances have not changed and therefore its position has not changed –
the dispute proceedings have not concluded and therefore there was no basis for
the Philippines' request for the right to suspend concessions against Thailand for
its alleged non-compliance with the ruling in DS371. Resolving the Appellate Body appointment impasse
was of the utmost urgence and Thailand said it remains
open to bilateral dialogue with the Philippines on the issue.
Mexico,
speaking on behalf of 121 WTO members, introduced once again the group's proposal
to start the selection processes for six vacancies on the Appellate Body. The increasing considerable number of members
submitting the proposal reflects a common concern over the current situation in
the Appellate Body that is seriously affecting its workings as well as the workings
of the overall dispute settlement system against the best interest of members, Mexico
said for the group.
The United
States however said it was still not in a position to support the proposal to start
the selection process because its systemic concerns regarding the Appellate Body
remain unaddressed, including Appellate Body overreach, which has undermined and
damaged the dispute settlement system. Referring
to the multi-party interim appeal arbitration arrangement (MPIA) which
22 WTO members have endorsed, the United States said members should address the
concerns outlined instead of redirecting their efforts towards arrangements that
would perpetuate the worst practices of the Appellate Body.
Around
20 members took the floor to reiterate the importance of resolving the impasse over
the appointment of new members as soon as possible and re-establishing a functioning
Appellate Body. Several called on the United
States to put forward its own proposals for resolving the impasse and said members
had an obligation under the DSU to fill vacancies as they arise. The EU said it
was not clear on what basis the US could claim the MPIA perpetuates the worst practices
of the Appellate Body since no award has yet to be issued under this new temporary
mechanism.
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".