Panel
Established to Review Chinese Measures on Imports of Canadian Canola Seeds
· DS589: China — Measures
Concerning the Importation of Canola Seed from Canada
· DS517: China — Tariff Rate
Quotas for Certain Agricultural Products
· DS316: European
Communities and Certain Member States — Measures affecting trade in large civil
aircraft: Implementation of the recommendations adopted by the DSB
· Appellate Body
appointments
· Other business
· Surveillance of
implementation
At a meeting of the Dispute Settlement Body (DSB) on 26 July,
WTO members agreed to the establishment of a panel at Canada’s request to examine
measures in China affecting the import of canola seed from Canada. Members also
considered a request from China for the establishment of a panel to review China’s
compliance with a 2019 ruling regarding its administration of tariff rate quotas
(TRQs) on certain agricultural products.
Canada
submitted its second request for the establishment of a dispute panel to examine
two sets of measures affecting the importation of canola seed from Canada, in response
to alleged repeated detection of quarantine pests in shipments from the two Canadian
companies. Canada's first request was blocked by China at the last DSB meeting on 28 June.
Canada
reiterated that it was disappointed and concerned that sufficient scientific evidence
to justify China’s canola measures had not been provided. Canada noted China is an important export market
for Canadian canola seed, and China’s restrictive measures continue to have a serious,
negative impact on Canadian producers. Canada
said that in the absence of concrete steps from China to address its concerns, Canada
is again requesting the establishment of a WTO panel. Canada said it remains open to continuing dialogue
with China in a manner that will address its concerns and fully restore market access
for Canadian canola seed in a timely fashion.
China
said it regretted Canada's decision to submit a second request for a panel, saying
it had constructively engaged with Canada on this matter and responded to Canada's
request for information. China has intercepted
diseases, insects and weeds from canola seed from Canada for a long time and its
concerns remain. WTO rules allow members to take measures necessary to protect human,
animal or plant life or health, and China's measures, adopted and implemented in
a transparent and non-discriminatory manner, are in full compliance with WTO rules,
China said.
The DSB
agreed to the establishment of the panel.
The United States, Chinese Taipei, Singapore, Russia, Japan, India, the European
Union, Brazil, Norway and Australia reserved their third party rights to participate
in the proceedings.
At the
start of the DSB meeting, the United States noted it had submitted a request on
15 July for WTO authorization to impose retaliatory measures on Chinese imports
in response to what the US said was China's failure to implement the 2019 WTO ruling
in DS517. As China on 23 July contested the level of suspension of concessions proposed
by the US, the matter is automatically referred to WTO arbitration, and the US request
cannot be taken up at the DSB meeting, the US noted.
China
said it wished to make clear that it objects to the level of suspension of concessions
proposed by the US and disagrees with the US allegation that China has failed to
bring its measures into compliance with its WTO obligations. China said any claims of alleged inconsistency
must first be addressed through WTO compliance proceedings before the level of suspension
of concessions can be assessed.
China
also submitted its first request for the establishment of a dispute panel to determine
whether China has complied with the 2019 ruling on its administration of TRQs for
the import of wheat, rice and corn. China
and the US originally agreed that China would have until 31 December 2019 to comply
with the ruling. That deadline was extended
by mutual agreement on seven different occasions, with the last deadline expiring
on 29 June 2021.
China
said it fully implemented the panel ruling by the original December 2019 deadline
by adopting a series of compliance measures. The US said China did not comply with
the WTO ruling but has failed to specify on what basis it considers China's implementation
to fall short of full compliance. Article
21.5 of the WTO's Dispute Settlement Understanding (DSU) states that where there
is disagreement regarding measures taken to comply with a WTO ruling, such disputes
shall be decided through recourse to these dispute settlement procedures, including
wherever possible resort to the original panel.
Regrettably,
the United States has instead chosen to pursue retaliation directly by filing a
request under Article 22.2 of the DSU, China continued. The United States has further refused to engage
with China on a sequencing agreement, as is customary practice in such a dispute. This has forced China to take the step of submitting
a panel request to review its compliance efforts. China strongly believes the compliance
panel will confirm China's full compliance.
Meantime, to harmonize different ongoing proceedings in this dispute, the
arbitrator under Article 22.6 should suspend its work pending the conclusion of
the Article 21.5 proceedings, China said.
The United
States said China continues to administer its wheat, rice and corn TRQs in a non-transparent
and unpredictable manner. Not only is the
public process by which China administers its TRQs non-transparent, but China also
has refused US requests for additional information that would allow the United States
to better understand how these TRQs have been administered in practice. Without such transparency, the United States and
other WTO members are left without the basic information necessary to assess China’s
compliance with fundamental WTO obligations.
For these
reasons, the United States said it is not in a position to agree to the establishment
of a compliance panel. The United States
said it stands ready to work constructively with China to reach a resolution to
this dispute, as it has done since adoption of the panel report.
On China's
procedural claims, the United States said that nothing in the DSU supports the view
that arbitration on a request for WTO authorization must be suspended while compliance
panel proceedings are ongoing. Where no
sequencing agreement has been reached, as in the present case, a complaining member
must request authorization to retaliate within the timeframe specified in Article
22.6 of the DSU. Accordingly, in this proceeding,
the United States has done so in a timely manner.
The DSB
agreed to revert to the matter should a requesting member wish to do so.
DS217, DS234: United States — Continued Dumping and Subsidy Offset Act of
2000 (CDSOA)
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. For the item
to be considered resolved and removed from DSB surveillance, the United States must
stop fully transferring collected duties, the EU said.
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 US said the EU was not asking other WTO members
to submit status reports where these members have said they achieved compliance
with the rulings in question, including one case where the EU was the complaining
party.
The EU
countered that the cases cited by the US were different from the CDSOA dispute,
where the US was continuing to make disbursements of duties collected to US firms
and where the WTO has authorized the EU and other members to impose retaliatory
measures against the US for its non-compliance with the ruling.
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 15 June , 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. As part of this effort to enhance cooperation,
the US intends to discuss its concerns relating to outstanding EU support measures
with the EU bilaterally.
The US
said it was therefore disappointed to again see the European Union inscribe the
preceding agenda item for DS217, and call for a US status report, while not submitting
an EU status report for DS316. The US said its position on status reports has been
consistent across disputes: under Article
21.6 of the DSU, once a responding member announces to the DSB that it has complied,
there is no further “progress” on which it can report, and therefore no further
obligation to provide a status report.
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. In the Airbus case, the EU notified a new set of compliance measures
to the DSB which were subject to a compliance panel report. This was issued in December
2019 and was subsequently appealed by the EU on the grounds that significant aspects
of the ruling cannot be regarded as legally correct and are very problematic from
a systemic perspective.
Whether
or not the matter is “resolved” is the very subject matter of this ongoing litigation,
the EU said; thus, the EU considers that in these circumstances it is not required
to submit an implementation status report to the DSB. The EU said it hopes that the understanding on
a cooperative framework for large single aircraft will allow the parties to resolve
their disagreements, including in relation to the provision of status reports to
the DSB.
Mexico,
speaking on behalf of 121 members, once again introduced the group's proposal to
start the selection processes for filling vacancies on the Appellate Body. The extensive number of members submitting the
proposal reflects a common concern over the current situation in the Appellate Body
that is seriously affecting the overall WTO dispute settlement system against the
best interest of members, Mexico said for the group.
Twenty
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 and pledged their support to continue efforts to find a solution
acceptable to all. Several members said addressing the current situation was a priority,
and that the absence of a functioning Appellate Body not only undermines the right
of all members but also undermines the functioning of the WTO.
The United
States said it was not in a position to support the proposed decision. The US continues to have systemic concerns with
the Appellate Body, which it has explained and raised over the past 16 years and
across multiple administrations. The US said
it believes that WTO members must undertake fundamental reform if the dispute settlement
system is to remain viable and credible, and that the system can and should better
support the WTO’s negotiating and monitoring functions. The US said it looked forward to further discussions
with members on those concerns and to constructive engagement with members at the
appropriate time.
For the
121 members, Mexico came back to say that the fact a member may have concerns about
certain aspects of the functioning of the Appellate Body cannot serve as pretext
to impair and disrupt the work of dispute settlement. There was no legal justification
for the current blocking of the selection processes, which is causing concrete nullification
and impairment of rights for many members, it said.
The chair
of the DSB, Ambassador Didier Chambovey of Switzerland,
noted that the matter is being dealt with by the chair of the General Council in
preparation for the WTO's 12th Ministerial Conference later
this year. Resolving the impasse is of great
interest to all WTO members and a matter which also requires political engagement
by all members.
In his
role as facilitator, Ambassador George Mina of Australia reported to the DSB on
his latest discussions with the Philippines and Thailand on efforts to overcome
their differences in the dispute proceedings for DS371, “Thailand
— Customs and Fiscal Measures on Cigarettes from the Philippines”.
Ambassador
Mina noted that on 31 March he reported that the talks were valuable
in providing the parties with an opportunity to present their respective views on
ways and means of resolving outstanding issues, and proposed continuation of the
process until the end of July. Since then,
the parties have continued to engage constructively with him in discussions, as
well as directly with each other, and there is hope these mutually supportive processes
will be able progressively lead the parties to build up elements of an agreement. However, additional time will be needed. Thus,
the facilitator-assisted discussions will need to be extended beyond 31 July, he
said.
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."