Australia and WTO dispute settlement
In this issue
- Recent Developments
- Australia as a Complainant
- Australia as a Respondent
- Disputes Involving Australia as a Third Party
- Meetings of the Dispute Settlement Body: May 2003
- Special DSB Meeting - 7 May 2003
- General DSB Meeting –19 May 2003
EC: Measures affecting the approval and marketing of biotech products (WT/DS291, 292 and 293)
Australia is seeking to join, as third party, Argentina, Canada and the USA in their WTO challenge to the European Union’s moratorium on approvals for the import of genetically modified organisms (GMO).
The EU moratorium means that imports of GMOs are being prohibited or restricted without a scientific basis. Australia’s trade interests and our interest in maintaining the role of the WTO in enforcing rules on science-based decision making are at stake. The dispute is important to Australia and all agricultural exporters. Eight other countries have so far indicated an intention to join the three complainants as third parties. These include both developed and developing agricultural exporters such as Chile, Colombia, Mexico, New Zealand and Uruguay.
Softwood lumber panel to be established
On May 7, 2003, the Dispute Settlement Body approved the establishment of a panel on the United States –Investigation of the International Trade Commission in Softwood Lumber from Canada. In this dispute, Canada challenges a decision by the US International Trade Commission allowing the application of anti-dumping and countervailing duties on Canadian softwood lumber. Canada asserts that the US is in violation of Article 3.1 of the WTO Anti-Dumping Agreement and Article 15.1 of the Subsidies and Countervailing Measures Agreement, by failing to base its threat of injury determination on positive evidence and by failing to conduct an objective examination of both the volumes of dumped imports and the subsidised imports. The EC and Japan reserved their rights to participate as third parties in the dispute.
European Communities: Export Subsidies on Sugar –Request for Consultations by Australia (WT/DS/265)
No new developments. Australia and Brazil (WT/DS/266) held joint consultations with the European Communities in Geneva on 21-22 November over their sugar regime. The consultations were attended by a record number of third parties (seventeen), mainly ACP (African, Caribbean and Pacific) countries and Canada, Colombia and India. At the consultations the EC did not provide answers to many of Australia and Brazil’s questions and subsequent communications have not proved fruitful. Australia is seeking further information including economic data. Australia, Brazil and Thailand are working together in developing claims for a possible panel.
Thailand has also subsequently requested consultations with the EC respect to certain subsidies provided by the EC in the sugar sector. They were held on 8 April 2003 (European Communities: Export Subsidies on Sugar (WT/DS283)).
United States: Continued Dumping and Subsidy Offset Act of 2000 (the “Byrd Amendment”) (WT/DS217 and WT/DS234)
The oral hearing the arbitration under Article 21.3(c) of the DSU on the reasonable period of time (RPT) for the U.S. to implement the DSB’s rulings and recommendations in the U.S. –Continued Dumping and Subsidy Offset Act (“Byrd Amendment”) dispute was held in Geneva on 6-7 May. The Arbitrator appointed for this proceeding was Appellate Body Member Taniguchi. The U.S. and eight of the Co-complainants made oral statements underlining the key points made in their written submissions and rebutting arguments put forward by the other side. The Arbitration Award will be issued no later than 13 June 2003.
European Communities: Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs (WT/DS290/1)
On 27 May Australia held consultations with the European Communities concerning EC legislation covering the registration and protection of geographical indications (“GIs”) on products such as cheese, beer, processed meat and fruit. Australia’s consultations were held jointly with consultations on the same legislation requested by the US. Australia and the US sought, through questions, to clarify the operation of the EC legislation and an explanation of how the EC measure conformed with the WTO Agreement. The EC provided some additional information about the relevant EU regulation.
Australia: Certain Measures Affecting the Importation of Fresh Fruit and Vegetables (WT/DS/270)
No new developments. On 18 October 2002 Philippines requested consultations with Australia regarding its quarantine measures for fresh fruit and vegetables (including bananas). Consultations were held in Geneva on 15 November 2002. Thailand and the EC participated as third parties.
Australia: Certain Measures Affecting the Importation of Fresh Pineapple Fruit (WT/DS/271)
No new developments. On 18 October 2002, the Philippines also requested consultations with Australia regarding its quarantine measures for fresh pineapple fruit. Consultations were held in Geneva on 15 November 2002. Thailand and the EC participated as third parties.
Australia: Quarantine Regime for Imports (WT/DS287)
Consultations between the EC and Australia on the Australian quarantine regime, both as such and as applied to certain specific cases, were held on 8 May 2003. The EC considers that Australia’s quarantine system and its application to particular products (pigmeat and poultry meat) may be contrary to the Sanitary and Phytosanitary Agreement (SPS Agreement), and in particular, but not limited to, its Articles 2.2, 2.3, 3.3, 4.1, 5.1, 5.6 and, if applicable, 5.7, 8 and Annex C. Canada, Chile, India and the Philippines joined the consultations as third parties.
EC: Measures affecting the approval and marketing of biotech products (WT/DS291, 292 and 293)
See item in recent developments above.
Canada: Measures Relating to Exports of Wheat (WT/DS/276)
In April, Australia reserved its third party rights in the dispute brought by the United States against Canadian Wheat Board measures relating to wheat exports and imported grain. Chile, Chinese Taipei, the EC, Japan and Mexico have also reserved third party rights in this dispute.
A Panel was established at the request of the U.S. on 31 March. The U.S. is claiming that the wheat sales practices of Canada and the Canadian Wheat Board are inconsistent with Article XVII of GATT 1994 on State-Trading Enterprises and that Canadian measures on the treatment of grain discriminated against imported grain inconsistently with Article III of GATT 1994 and Article 2 of the TRIMS Agreement.
Canada has requested that the Panel make preliminary rulings, and a hearing is scheduled for 6 June in Geneva. Canada is arguing that the U.S. has not sufficiently specified its claim in the request for establishment of a panel in accordance with Article 6.2 of the DSU. Canada is also asking the Panel to make a preliminary ruling establishing a procedure for the protection of proprietary or commercially sensitive information that may be submitted to the panel in the course of proceedings.
US: Subsidies on Upland Cotton (WT/DS267)
See item under Meetings of the DSB - General DSB Meeting on 19 May 2003 below.
Mexico: Measures Affecting Telecommunications Services (WT/DS204)
No new developments. The Panel has not been able to complete its work in 6 months due to time needed for translation of documents and the complexity of the issues. The Panel now expects to complete its work in August 2003.
The US alleges that Mexico has failed to implement its GATS commitments for the cross-border supply of basic telecommunications services. It alleges that certain measures largely embodied in Mexico’s International Long Distance Rules breach sections 1 and 2 of the basic telecommunications Reference Paper incorporated into Mexico's Schedule of Commitments, and section 5 of the GATS Annex on Telecommunications.
Australia, Brazil, Canada, Cuba, the EC, Guatemala, Honduras, India, Japan and Nicaragua reserved third party rights in this dispute.
European Communities (EC): Measures Affecting Meat and Meat Products (Hormones) (WT/DS26)
No new developments. The EC is still facing WTO authorised retaliation by the U.S and Canada because of its failure to implement within a reasonable period of time. It was earlier reported that the U.S and the EC were engaged in discussions on a compensation arrangement. Australia has registered its expectation that any compensation will be applied on a non-discriminatory basis.
Canada: Measures Affecting the Importation of Milk and the Exportation of Dairy Products (WT/DS103 and WT/DS113)
Members have been notified of mutually agreed solutions by Canada and the United States and by Canada and New Zealand. Under the agreements, which are similar but in slightly different terms, Canada reports that it has eliminated its commercial export milk (CEM) program at provincial level as of 30 April 2003, that it won’t exceed its export subsidy reduction commitments for the marketing year 2002 for butter and skim milk powder but that it will for cheese and other milk products because of long term CEM contracts in place at the time of the Appellate Body Report, and that it will meet its commitment for all dairy products for 2003.
As a result, the U.S. and NZ have withdrawn their retaliation requests and Canada has withdrawn its request for Article 22.6 arbitration.
United States: Section 110(5) Copyright Act (“Homestyle”exemption) (WT/DS160)
No new developments. In April 2003 Congress passed legislation to compensate the EC for the US failure to comply with the WTO decision against US copyright law. Through arbitration under Article 25 of the DSU, the level of nullification or impairment of benefits to the EC, as a result of the operation of section 110(5)(B) of the US Copyright Act, has been assessed at US$1.1 million per year.
United States: Tax Treatment for “Foreign Sales Corporations”(WT/DS108)
On 7 May the WTO Dispute Settlement Body (DSB) authorised the EU to increase customs duties as a further step towards retaliatory sanctions against the US in the Foreign Sales Corporations (FSC) case. The EU had challenged the tax benefits through the FSC for major US exporting companies such as Boeing and Microsoft. A dispute settlement panel ruled the law illegal in 2001 and gave the EU the right to raise tariffs. The EU will now be able to impose countermeasures against the US, as it has the DSB authorisation and also has notified the full list of products on which such countermeasures can be levied. The US$4 billion retaliation figure is a record high in WTO dispute settlement.
Shortly after the DSB approval, EU Trade Commissioner Pascal Lamy was quoted as saying that the EU will "review the situation in the autumn," and if there is no sign that compliance is on the way at that time, it would start the legislative procedure for the adoption of countermeasures by 1 January 2004. The US said it is taking action to amend the FSC legislation.
Japan: Measures Affecting the Importation of Apples (WT/DS245)
No new developments. The US complaint in this dispute centres on Japanese quarantine measures that include the prohibition of imported apples from orchards where fire blight is detected (or if it is detected within a 500 metre buffer zone), a requirement for three orchard inspections a year and post-harvest treatment of exported apples with chlorine. The U.S. argues that these measures are inconsistent with Japan’s obligations under Article XI of GATT 1994, the SPS Agreement and Article 14 of the Agreement on Agriculture. The U.S has also claimed non-violation.
A Panel was established at the 3 June 2002 DSB meeting on request by U.S. Australia, Brazil, EC, New Zealand, and Taiwan have reserved third party rights. The Panel expects to issue its final report mid-year.
The Dispute Settlement Body (DSB) met on 7 May (Special DSB Meeting) and 19 May (General Meeting). The next regular DSB meeting is scheduled for 24 June.
Australia uses DSB meetings to monitor progress and to register its views on disputes of interest. The agendas of the May DSB meetings were as follows:
Item 1: Request for establishment of a panel
Item 2: Recourse by the EC to Article 4.10 of the SCM Agreement and Article 22.7 of the DSU
Item1: Implementation of recommendations adopted by the DSB - Status Reports
Item 2: First request for Panel establishment by Chile
Item 3: First request for Panel establishment by Argentina
Item 4: Adoption of the report of the Panel
Item 5: U.S: Subsidies on Upland Cotton - Procedures for developing information under Annex V of the SCM Agreement
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This publication is intended to provide a general update and the information within it should not be relied on as complete or definitive.