Australia and WTO Dispute Settlement Bulletin - April 2004

Recent Developments

European Communities: Conditions for the granting of tariff preferences to developing countries (WT/DS246)

The Appellate Body issued its report in this dispute on 7 April. It reversed the Panel’s finding that the requirement for “non-discriminatory” treatment prevented differentiation between developing countries through preferential tariff schemes. The Appellate Body held that such differential treatment is permitted under WTO rules, under certain conditions, including that preferential treatment be available to all “similarly situated” beneficiaries of tariff preferences having the economic needs that the treatment is intended to address. With respect to the preferential tariff scheme that is the subject of this dispute, the Appellate Body upheld the Panel’s finding (on different reasoning) that the EU’s current Generalised System of Preferences (GSP) regime for drug-affected countries is discriminatory with regard to the selection of beneficiary countries. Seventeen developing countries (including the beneficiaries of the drug arrangements) as well as the US were third parties to this dispute. Both Panel and Appellate Body reports are available on the WTO website.

United States – Final dumping determination on softwood lumber from Canada (WT/DS264)

The Panel issued its report in this dispute on 13 April. The Panel (with one member dissenting) found in favour of Canada’s claim on the issue of “zeroing” in anti-dumping calculations, holding that using a zeroing methodology in determining the existence of dumping margins is inconsistent with the Anti-Dumping Agreement. However, the Panel held in favour of the United States with regard to other elements of the dispute. “Zeroing”, as considered by the Panel in this case, refers to the US practice of aggregating dumping margins to zero where the weighted average export price was greater than the weighted average normal value (i.e in situations of negative dumping). The EC, India and Japan are third parties to this dispute. The Panel report is available on the WTO website.

Proposed amendments to the working procedures for Appellate Review

On 8 April, the Chairman of the Appellate Body sent a letter to the Dispute Settlement Body (DSB) Chairman suggesting a series of amendments to the working procedures for Appellate Review. Comments from Members are sought by 1 June. The letter and text of proposed amendments are available on the WTO website (document reference number: WT/AB/WP/8).

WTO Secretariat report on Anti-Dumping investigations: 1 July – 31 December 2003

The WTO Secretariat reported that in the second half of 2003, there was a significant decline in the number of Members initiating anti-dumping investigations compared with the corresponding period in 2002. India issued the largest number of investigations in the second half of 2003 (33 investigations), while China remained the country most often subject to such investigations. Australia initiated seven investigations in this period. The chemicals sector was the most affected by both investigations initiated and the imposition of final anti-dumping measures. More details of the report, as well as the semi-annual anti-dumping reports submitted by Members, are available on the WTO website.

Australia as a Complainant

United States: Continued Dumping and Subsidy Offset Act of 2000 (the “Byrd Amendment”) (WT/DS217 and WT/DS234)

The arbitration proceeding which will determine the level of retaliation permitted against the United States was held in April. The arbitrator’s award is expected in early June 2004. Eight of the eleven complainants in this dispute (not including Australia) requested authorisation to retaliate against the United States in January. Australia has agreed to allow the United States until 27 December 2004 to comply with the Panel and Appellate Body rulings.

European Communities: Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs (WT/DS290)

The complainants in this dispute, Australia and the United States, submitted their first written submissions to the Panel on 23 April. This dispute involves complaints by Australia and the United States with regard to the WTO consistency of the EC regime for the protection of geographical indications for foodstuffs and agricultural products in the EC. The Panel, which was composed by WTO Director-General Dr Supachai late in January 2004, is expected to report on this dispute late in 2004. Relevant Australian submissions to the Panel, including Australia’s first written submission, are available at:

http://www.dfat.gov.au/trade/negotiations/disputes/290_protection_of_trademarks.html.

European Communities: Export Subsidies on Sugar (WT/DS/265)

First oral hearings before the Panel in Geneva concluded on 1 April and f urther oral hearings are scheduled in May. Australia’s responses to questions from the Panel and the EC, along with Australia’s rebuttal submission, are available at :

http://www.dfat.gov.au/trade/negotiations/disputes/265_export_subsidies_sugar.html.The Panel is scheduled to report towards the end of 2004.

Australia as a Respondent

Australia: Certain Measures Affecting the Importation of Fresh Fruit and Vegetables (WT/DS270)

No new developments. A panel has been established but not yet composed.

Australia: Certain Measures Affecting the Importation of Fresh Pineapple Fruit (WT/DS/271)

No new developments. Consultations were held in November 2002 at the request of the Philippines, but no panel has been established.

Australia: Quarantine Regime for Imports (WT/DS287)

No new developments. A panel was established in November 2003 but not yet composed.

Selected disputes that have involved Australia as a Third Party

Mexico: Measures Affecting Telecommunications Services (WT/DS204 )

The Panel issued its report in this dispute to WTO Members on 2 April. The US was successful in a number of its claims that Mexico was in breach of its GATS commitments with regard to the activities of dominant Mexican telecommunications carrier Telmex. Australia was a third party to this dispute. The Panel’s report is available on the WTO website.

Canada: Measures Relating to Exports of Wheat (WT/DS276)

The Panel report in this dispute was issued to WTO Members on 6 April. The Panel found that the United States was successful with regard to its claims concerning the treatment of imported grain, but unsuccessful in its complaint concerning the activities of the Canadian Wheat Board. Australia’s third party submission in this dispute is available at: http://www.dfat.gov.au/trade/negotiations/disputes/aust_3psub.html.

The Panel’s report is available on the WTO website.

European Communities: Measures Affecting the Approval and Marketing of Biotech Products (WT/DS291, 292 and 293)

The complainants in this dispute (the United States, Canada and Argentina) made their first written submissions to the Panel in April. The Panel will consider the EC’s moratorium on the approval of genetically modified organisms and the marketing and import bans maintained by some EC states on genetically modified products.

United States: Subsidies on Upland Cotton (WT/DS267)

Media reporting suggests that the interim Panel report was circulated to the parties on 26 April. This dispute concerns a challenge by Brazil with regard to US cotton subsidies. The final Panel report is expected to be issued mid 2004. Australia is one of thirteen third parties. Australia’s submissions to the Panel are available at: http://www.dfat.gov.au/trade/negotiations/disputes/wto_subsidies_upland_cotton.html

European Communities: Measures Affecting Meat and Meat Products (Hormones) (WT/DS26)

No new developments. The US has indicated its intention to maintain the suspension of concessions on the basis that the EC has still not made its import prohibition regime WTO-consistent. Canada has offered to consult with the EC on the matter, while also maintaining its suspension.

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

The EC’s programme of countermeasures entered into force on 1 March. These apply as additional customs duties on selected US products at an initial rate of 5%, to be followed by monthly increases of 1% up to a ceiling of 17% to be attained on 1 March 2005 if the US has not complied with its WTO obligations before then.

Japan: Measures Affecting the Importation of Apples (WT/DS245)

Japan and the United States have agreed that the “reasonable period of time” for implementation of the recommendations and rulings of the Dispute Settlement Body will expire on 30 June 2004. The Panel and Appellate Body reports in this dispute were adopted on 10 December 2003.

Meetings of the Dispute Settlement Body

DSB Meetings – 20 and 26 April

The Panel and Appellate Body reports in EC – Conditions for the granting of tariff preferences to developing countries (WT/DS246) were adopted (see item in Recent Developments above) at the 20 April meeting. A special DSB meeting was convened on 26 April to adopt the Panel report in United States – Investigation of the international trade commission in softwood lumber from Canada (WT/DS277). The Panel report in this dispute was issued on 24 March, finding in favour of Canada’s claims that USITC determinations with regard to Canadian softwood lumber were inconsistent with obligations arising from both Anti-Dumping and Subsidies and Countervailing Measures Agreements.