AUSTRALIA WINS WTO CASE ON LAMB

Australia and WTO Dispute Settlement

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Monthly Bulletin: April 2001

Trade Minister Mark Vaile has welcomed the ruling by the World Trade Organization's Appellate Body that the United States' import restrictions on lamb are illegal, saying it is a vindication of the Government's action in challenging the US measures.

In its report released on 1 May 2001, the Appellate Body upheld the Panel's findings that the United States safeguard measure on imported lamb meat was inconsistent with obligations under the GATT 1994 and the Agreement on Safeguards. The Appellate Body also made an additional finding in Australia's favour that the United States acted inconsistently by failing to demonstrate a threat of serious injury in applying the measure.

The Appellate Body has comprehensively confirmed all of the findings of the WTO panel, that the US has acted inconsistently with its WTO obligations, Mr Vaile said.

Taken with the recent WTO decision on Korea's beef import restrictions, this decision on lamb confirms the value of the WTO dispute settlement system and underlines the Government's commitment to using the system to fully protect and advance Australia's interests.

The next step would be for the United States to implement the WTO rulings. Under the WTO rules, the United States has a reasonable period of time to bring its measure into WTO-conformity. Australia has recourse to accelerated procedures to examine any implementation action taken by the United States. Australia also has rights to seek compensation or to impose retaliation in the event the United States fails to implement.

Australia as a Complainant (3)

Korea: Measures affecting imports of fresh, chilled and frozen beef (WT/DS169)

On 19 April 2001 Australia, United States (US) and Korea agreed on a reasonable period of time for Korea to implement the recommendations of the DSB, expiring on 10 September 2001. The DSB was formally notified of the agreement on 24 April 2001. Korea has agreed to consult with Australia and the US during this period with respect to Korea's implementation. Specifically, Korea has agreed to notify Australia and the US of any proposed measures and to afford both Members an opportunity to comment on any proposed measures prior to their taking effect.

WTO: Korea Beef - Agreement Reached on Implementation Period, Media release by the Australian Minister for Trade, Mark Vaile, 23 April 2001. Korea Beef - Delivering trade liberalisation from the border to the butcher's shop - a backgrounder on the result.

United States: Safeguard measure on imports of fresh, chilled and frozen lamb meat (WT/DS177 and WT/DS178)

On 1 May 2001, the Appellate Body upheld the Panel's findings that the United States safeguard measure on imported lamb meat was WTO-inconsistent.

WTO Rules for Australia Again on Lamb, Media release by the Australian Minister for Trade, Mark Vaile, 2 May 2001, and background to the case Summary of the Appellate Body's findings, 1 May 2001

United States: Continuing Dumping and Subsidy Offset Act of 2000 (WT/DS217) (Joint consultation request)

No new developments.

Disputes involving Australia as a Third Party (11)

Chile: Price band system and safeguard measures relating to certain agricultural products (WT/DS207)

No new developments. The Panel was established at the 12 March DSB meeting.

 EC: Measures affecting meat and meat products (Hormones) (WT/DS26)

No new developments. The EC is still facing WTO-authorised retaliation by the US and Canada because of its failure to implement within a reasonable period of time.

United States: Import prohibition of certain shrimp and shrimp products (the shrimp/turtle" case) (WT/DS58)

The Panel's report on the WTO consistency of the revised US measures, due on 23 March 2001, has been postponed.

Canada: Measures affecting the importation of milk and the exportation of dairy products (WT/DS103 and WT/DS113)

The composition of the Article 21.5 compliance panel was announced on 12 April 2001. The panel was established to examine US and New Zealand complaints that Canada's implementation measures relating to the exportation of dairy products remained WTO-inconsistent. Australia, the EC and Mexico have reserved their third party rights. The panel is composed of Mr Ernst-Ulrich Petersmann (Chairman), Mr Guillermo Aguilar Alvarez and Mr Peter Palečka. The Chairman of the original panel, Mr Tommy Koh, was unavailable and was replaced by Mr Palečka. Australia is required to submit its third party submission by 18 May 2001. Third party written submissions are due on 18 May 2001.

United States: Section 110(5) Copyright Act ("Homestyle"exemption) (WT/DS160)

No new developments. As previously reported, the reasonable period of time for the US to implement the recommendations and rulings of the DSB on section 110(5) of the US Copyright Act is 12 months from the adoption of the report, which expires on 27 July 2001.

United States: Definitive safeguard measures on imports of wheat gluten from the EC (WT/DS166)

On 12 April 2001 the US and EC formally notified the DSB that it had agreed on a reasonable period of time to implement the DSB recommendations and rulings of 4 months and 14 days expiring on 2 June 2001.

United States: Measures treating export restraints as subsidies (WT/DS194)

No new developments. As previously reported the Panel was established on 11 September 2000 and its membership constituted on 23 October 2000.

United States: Definitive safeguard measures on imports of circular welded carbon quality line pipe from Korea (WT/DS202)

The Panel has held its first hearing with all parties.

United States: Tax Treatment for Foreign Sales Corporations (WT/DS108)

No new developments. As previously reported the Article 21.5 compliance panel, established to review the WTO consistency of the revised US FSC scheme, has advised that it expects to complete its work by July 2001.

Brazil: Export financing program for aircraft (WT/DS46)

The Article 21.5 compliance panel established to examine the WTO consistency of Brazil's implementation measures relating to export finance programs for aircraft held its oral hearing on 4-5 April 2001.

Canada: Export credits and loans guarantees for regional aircraft (WT/DS222)

No new developments. As previously reported a WTO panel was established on 12 March 2001 to examine Brazil's complaint that the export credits and export financing provided by Canada to its regional aircraft industry are WTO-inconsistent.

Disputes in which Australia has a Policy or Economic Interest (7)

EC: Measures affecting the prohibition of asbestos and asbestos products (WT/DS135)

At its meeting on 5 April 2001 the DSB adopted the Appellate Body report and the Panel report as modified by the Appellate Body Report in this dispute. The reports address a number of important issues including like products and non-violation. The findings are relevant to domestic proposals to control imports and usage of asbestos in Australia.

Japan: Measures affecting agricultural products (Varietal testing) (WT/DS76)

No new developments.

EC: Regime for the Importation, Sale and Distribution of Bananas (WT/DS27)

The EC and the United States announced on 11 April 2001 that they had reached a bilateral agreement in this dispute. The agreement provides that a transitional regime with quotas allocated to traders based on historic trade levels will apply from 1 July 2001 and that a tariff-only system will be implemented by 2006. It continues a sub-quota reserved for bananas of ACP origin, but at a reduced level. The EC's proposed new regime is not WTO-consistent, and will require that the EC obtain a GATT Article XIII waiver to reserve a particular tariff quota for bananas of ACP origin as well as a renewal of a waiver from Article I for tariff preferences for ACP bananas. The US has agreed to work actively to secure acceptance of the EC's request for the necessary WTO waivers.

On 17 April 2001, Ecuador requested consultations with the EC to clarify the scope of the bilateral agreement with respect to the WTO-consistency of the European banana import regime proposed therein and the manner in which it affects Ecuador's rights under the GATT 1994 and the GATS. Ecuador and the EC subsequently announced a bilateral settlement on 30 April 2001.

Brazil: Measures affecting patent protection (WT/DS199)

No new developments.

United States: Section 129(c)(1) of the Uruguay Round Agreements Act (WT/DS221) (Consultation request)

No new developments.

European Communities: Tariff rate quota on corn gluten feed from the United States (WT/DS223) (Consultation request)

No new developments.

Canada: Patent Protection Term (WT/DS170)

No new developments. As previously reported, the arbitrator has determined that a reasonable period of time for implementation by Canada of the DSB's recommendations and rulings in relation to this matter is 10 months expiring on 12 August 2001.

India: Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products (WT/DS90)

As part of its implementation measures in this dispute, India has removed the remaining quantitative restrictions on imports of agricultural, textile and industrial products. A recent press report on the removal of the quantitative restrictions (Australian Financial Review 20/4/01 p.26) highlighted a number of different Australian companies who were benefiting from the increased market access in areas such as fresh fruit, macadamia nuts and wine.

Meetings of the Dispute Settlement Body: April 2001

The DSB, consisting of all the Members of the WTO, met on 5 and 26 April 2001. The next regular DSB meeting will be held on 16 May 2001. Australia uses DSB meetings to monitor progress and to register its views on disputes of interest. The agendas of the April DSB meetings were as follows (any Australian interventions are indicated):

DSB Meeting 5 April 2001

European Communities: Regime for the importation, sale and distribution of bananas (WT/DS27)

Japan: Measures Affecting Agricultural Products (Varietal testing) (WT/DS76)

Australia registered its continuing interest in this issue

India: Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products (WT/DS70)

Turkey: Restrictions on Imports of Textile and Clothing Products (WT/DS34)

European Communities: Anti-dumping Duties on Imports of Cotton-Type Bed-Linen from India (WT/DS141)

EC: Measures Affecting the Prohibition of Asbestos and Asbestos Products (WT/DS135)

Thailand: Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel; H-Beams from Poland (WT/DS122)

This item consisted of a discussion on the timeframe for the appointment of Appellate Body Members. Australia called for sufficient flexibility at the front end of the process to ensure that there was an appropriate pool of nominations. The following time frame and process was agreed between Members:

17 April 2001           Invitation to forward nominations
                        to the Director-General

29 June 2001            Close of nominations

2 July 2001             Selection Committee to commence work
                        (allowing for an extension of the
                        deadline for nominations by the DSB
                        if necessary)

After Northern          DSB decision on appointees
Summer break

Statement by Philippines in relation to Philippines Measures Affecting Trade and Investment in the Motor Vehicle Sector, complaint by the United States (WT/DS195/1).

Special DSB Meeting - 26 April 2001

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The Monthly Bulletin is an overview of Australian involvement in WTO Dispute Settlement from the WTO Trade Law Branch of the Department of Foreign Affairs and Trade . It updates Australian involvement in specific WTO disputes and, more generally, in disputes in which Australia has a policy or economic interest. Also included are the agendas of meetings of the WTO Dispute Settlement Body (DSB), with specific reference to any Australian interventions.

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