Australia and WTO Dispute Settlement

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Monthly Bulletin: July 2001

RESOLVING EXPORT ACCESS PROBLEMS THROUGH THE WTO SYSTEM

  • Are you an exporter or intending to export?
  • Do you export to one or more of the 142 markets that belong to the World Trade Organization?
  • Are you experiencing access problems in one or more of those markets?
  • Is the access problem related to a measure or measures of the importing government (at central, regional or local government level?)

If you have answered "yes" to those questions, the Department of Foreign Affairs and Trade stands ready to examine and discuss options for resolution of your access problems.  Exporters can contact WTO legal experts in the Department on the following numbers:

  • Email:  wto.disputes@dfat.gov.au
  • Fax:  02 6273 1527
  • Telephone:  02 6261 2617 or 02 6261 1890

Australia as a Complainant (3)

Korea:  Measures affecting imports of fresh, chilled and frozen beef (WT/DS169 and WT/DS161)

No new developments. Australia, the United States (US) and Korea have agreed on a reasonable period of time for Korea to implement the recommendations of the DSB, expiring on 10 September 2001. Korea has agreed to consult with the complainants on Korea's implementation.

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

No new developments. The US confirmed at the 20 June 2001 meeting of the Dispute Settlement Body (DSB) that it intends to implement the DSB recommendations and rulings in a manner that respects US WTO obligations and that it will need a reasonable amount of time in which to do so. The parties have commenced discussions on a reasonable period of time.

United States: Continuing Dumping and Subsidy Offset Act of 2000 (“Byrd Amendment”) (WT/DS217)

Australia, Brazil, Chile, EC, India, Indonesia, Japan, Korea, and Thailand requested establishment of a panel at the 24 July 2001 DSB meeting. The US exercised its right to prevent establishment of a panel and the request will be deferred to the next meeting when it is expected to be established. Canada and Mexico requested separate Article XXII consultations concerning the Byrd Amendment after the US refused their request to join the original request for consultations (WT/DS234).       

Disputes involving Australia as a Third Party (10)

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

No new developments. The first substantive meeting of the parties is scheduled for 12-13 September 2001 with the final report scheduled to be publicly released on 21 February 2002.

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)

Malaysia filed a notice of appeal on 23 July 2001 against the Article 21.5 (implementation) panel report circulated on 15 June 2001.  The implementation panel found that the revised US measures were consistent with the 1998 Appellate Body ruling. The implementation panel found that the import prohibition was provisionally justified under Article XX GATT 1994 as long as the conditions stated in the report (in particular, the ongoing serious good faith efforts to reach a multilateral agreement) remained satisfied.

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

The compliance panel circulated its report to WTO Members on 11 July 2001 and found in favour of the US and NZ by ruling that the revised Canadian measures amount to prohibited export subsidies.  Canada publicly announced its intention to appeal the report on 6 July 2001 after the report was released to the parties on 5 July 2001.

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

The DSB agreed to a United States proposal to extend 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 from 27 July 2001. The extension is to 31 December 2001 or the end of the current session of the US Congress whichever is earlier. The US advised the 24 July DSB meeting that the US and the EC have commenced negotiations on compensation and have jointly requested arbitration pursuant to Article 25 to determine the level of nullification and impairment of benefits.

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

No new developments. The Panel released its report on 29 June 2001 and found that an export restraint as defined in this dispute does not constitute a “financial contribution” within the meaning of Article 1.1(a) of the WTO Subsidies Agreement. The Panel also found that US law does not require the imposition of countervailing duties against practices that are not subsidies and is therefore not inconsistent with the Subsidies Agreement.

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

The Chairman of the Panel has advised that the Panel expects to complete its work by early September 2001.

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

No new developments. The Article 21.5 compliance panel, established to review the WTO consistency of the revised US FSC scheme, is expected to issue its report publicly in August 2001.  The Interim Report was released to the US and the EC on 22 June 2001 and media reports indicate that the Panel has found the US implementing measures to be inconsistent with its WTO obligations.

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

The second Article 21.5 Panel circulated its report on 26 July 2001 and found that Brazil's export financing program (PROEX III) was not inconsistent, on its face, with the Agreement on Subsidies and Countervailing Measures. Canada has welcomed the ruling in a press released dated 26 July 2001 claiming that the report lays out conditions to which Brazil's program must adhere to be WTO compliant.

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

No new developments. The first substantive meeting of the parties and third parties was held on 27-28 June 2001. The panel is scheduled to release its report publicly in October 2001,

Disputes in which Australia has a Policy or Economic Interest (6)

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

At the 24 July DSB meeting, Japan advised that it had completed technical consultations with the US on a new methodology on the eight agricultural products current subject to prohibition. Japan expected that it would be able to notify the DSB soon of a mutually satisfactory solution. 

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

The EC is continuing its efforts to obtain the two waivers it requires to implement its bilateral settlements with the United States and Ecuador in this dispute. 

Brazil:  Measures affecting patent protection  (WT/DS199)

The United States and Brazil announced on 25 June 2001 that the WTO dispute would be withdrawn and that the parties would seek to resolve the dispute through a newly established bilateral consultation mechanism. The joint communication explained that the withdrawal was without prejudice to their different interpretations of the consistency of section 68 of Brazil's industrial policy law with Brazil's obligations under TRIPS.

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

Canada requested the establishment of a panel at the 24 July DSB meeting. The United States exercised its right to prevent establishment of the panel at the meeting and it is expected that the panel will be established at the next DSB meeting. Canada is challenging the legality of a specific aspect of the US statute controlling the US implementation of DSB rulings. The dispute is closely linked to the United States – Measures Treating Export Restraints as Subsidies also brought by Canada.

Canada: Patent Protection Term (WT/DS170)

Canada has amended its Patent Act to comply with its WTO TRIPS obligations. A WTO panel and Appellate Body had previously ruled that Canada's 17 year term of protection for certain patents was inconsistent with Canada's obligations under TRIPS. The amendment effectively extends the patent term of 25 commercially significant brand name drugs by an average 6 months.  Canada notified its compliance at the 24 July DSB meeting.

European Communities: Measures Affecting Soluble Coffee (WT/DS209)(Consultation request)

The EC and Brazil announced on 11 July that they had reached an agreement to solve their dispute over soluble coffee with the EC agreeing to provide greater access to its market to soluble coffee from Brazil. Brazil had requested consultations on the EU tariff regime applied to its soluble coffee. One of Brazil's claims was that the “drugs regime” under the EC's system of developing country preferences - which confers special treatment on Andean and Central American Common Market countries that are conducting a campaign to combat drugs – was inconsistent with the EC's WTO obligations.

Meetings of the Dispute Settlement Body: July 2001

The DSB, consisting of all the Members of the WTO, met on 24 June 2001. The next regular DSB meeting will be held on 23 August 2001.  Australia uses DSB meetings to monitor progress and to register its views on disputes of interest. The agenda of the July DSB meetings was as follows (any Australian interventions are indicated):

DSB Meeting – 24 July 2001

1. Implementation status reports           

A. EC: Regime for the importation, sale and distribution of bananas  (WT/DS27)

B. Japan: Measures Affecting Agricultural Products (“Varietal testing”) (WT/DS76)

Australia noted Japan's latest status report and registered its continuing interest in this matter.

2. Panel Request

US Anti-Dumping and Countervailing Measure on Steel Plate from India (WT/DS206)

Panel was established at India's request.

3. Panel Request

EC – Trade Description of Sardines  (WT/DS231)

Panel was established at Peru's request.

4. Panel Request

EC – Anti-Dumping Duties on  Iron Tube or Pipe Fittings from Brazil (WT/DS219)

Panel was established at Brazil's request.

5. Panel Request

US – Continued Dumping and Subsidy Offset Act of 2000 (Byrd Amendment) (WT/DS217)

Australia has previously registered its concerns regarding the WTO-consistency of the so-called "Byrd Amendment".  Australia has been particularly concerned that this law may provide financial inducement to a greater number of producers to bring forward and support anti-dumping petitions. We have also registered our concern that, if left unchallenged it could also result in a proliferation of such incentive-based legislation globally for anti-dumping practitioners. For that reason, we have decided to join with the large number of co-complainants requesting a panel on this issue. We believe, that it is important that the law at issue be subjected to thorough examination through the dispute settlement process to determine its standing under the WTO Agreements and GATT 1994 -  a view clearly shared by a significant proportion of both developed and developing economies within the WTO system.

Request deferred until next DSB meeting.

6. Panel Request

US – Section 129(c)(1) URAA  (WT/DS221)

Request deferred until next DSB meeting.

7. Adoption of Panel Report

US –Import Prohibition of certain shrimp and shrimp products (Article 21.5) (WT/DS58)

Article 21.5 Panel Report was not adopted as Malaysia indicated it would file an appeal.

8. Adoption of Panel Report

Mexico –Anti-dumping investigation of high fructose corn syrup (Article 21.5) (WT/DS58)

Article 21.5 Panel Report was not adopted as Mexico indicated it would file an appeal.

9.&10. Proposed modifications of the reasonable period of time under DSU Article 21.3 (WT/DS160/14, WT/DS136/13, WT/DS162/16)     

The proposed modification of the reasonable period of time raises a number of systemic issues, including in the context of the DSU review. While we would not oppose an extension negotiated between the parties to the dispute, the interests of third parties in prompt implementation must also be taken into account. Australia was a third party in the dispute and has a strong interest in prompt implementation by the United States. Until the United States brings its law into conformity with the TRIPS agreement, Australian musicians and composers will continue to be deprived of their right to royalties for the commercial use of their works in the United States. Australia also takes note of the bilateral agreement reached between the US and EC concerning arbitration and registers its expectation that the details of this agreement will be circulated to Members in due course.

The DSB agreed to the US proposals to extend the reasonable periods of time until the earlier of 31 December 2001 or the end of the current session of the US Congress.

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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.

For more information and copies of previous issues, visit Australia and WTO dispute settlement.

For more general information relating to the Doha Round of Trade negotiations, see the WTO Doha Round Bulletin.