Australia and WTO dispute settlement

Monthly Bulletin - August 2004

In this issue

Recent Developments

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

The WTO Appellate Body report in this dispute was issued on 30 August.  The Appellate Body upheld the Panel’s findings that the US had failed in its claim that activities of the Canadian Wheat Board contravened Canada’s obligations under the GATT 1994. The Appellate Body upheld the interpretation put forward by Canada and some third parties (including Australia) of GATT Article XVII, which concerns the commercial activities of state trading enterprises. 

Australia’s third party submission in the appeal.

US:  Final dumping determination on softwood lumber from Canada (WT/DS264)

The WTO Appellate Body report in this dispute was issued on 11 August.  The Appellate Body upheld the Panel’s findings that using a zeroing methodology in determining the existence of dumping margins on Canadian softwood lumber is inconsistent with the Anti-Dumping Agreement. “Zeroing” in this context 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 Appellate Body noted that its findings in this dispute were specifically applicable to the circumstances at issue in this dispute and not a finding on the WTO-consistency of zeroing methodology as such.  US zeroing methodology “as such” has been challenged by the EC in a separate, on-going dispute (see WT/DS294).

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

The arbitration award on the level of retaliation to be permitted against the United States by eight of the complainants (not including Australia) in the “Byrd Amendment” dispute was issued on 31 August. The complainants requesting retaliation rights were the EC, Canada, Mexico, Chile, Korea, Japan, Brazil and India. The Arbitrator decided the complainants are permitted to retaliate according to a formula that determines the trade effects of yearly payments under the Byrd Amendment suffered by each complainant. Seven complainants had also included in their individual calculations of nullification and impairment a one-seventh “share” of the total offset payments attributed to duties collected on products from other, non-retaliating WTO Members (less the amount the individual complainants had claimed). This approach was not accepted by the Arbitrator.  In concluding remarks, the Arbitrator noted that the role to be played by the suspension of obligations in the dispute settlement system was not entirely clear. It also noted the need for clarification of the concept of nullification and impairment.  Arbitrators decisions are not subject to appeal.

Australia, Thailand and Indonesia have agreed to allow the US until 27 December 2004 to comply with the Panel and Appellate Body rulings.

Australia as a Complainant

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

The second Panel hearing was held in Geneva on 11 and 12 August.  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 has indicated that it will endeavour to issue its report before the end of the year.

Relevant Australian submissions to the Panel, including Australia’s written submissions and oral statements made to the Panel and answers to Panel questions

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

The Panel’s interim report was issued to the parties on 4 August.  The parties to the dispute (Australia, Brazil, Thailand and the EC) were allowed a time period for comment.  The Panel report is scheduled to be issued to the parties on 8 September.  The report will remain confidential pending translation and public circulation.  The public circulation date will depend on the time taken for translation, which cannot be estimated at this time. 

Australia’s responses to questions from the Panel and the EC, along with Australia’s rebuttal submission and oral statements

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

See item above in Recent Developments.

Australia as a Respondent

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

No new developments.  (A panel was established in August 2003 but has not yet been 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 has not yet been composed.)

Selected disputes that have involved Australia as a Third Party

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

No new developments. (An Article 21.5 compliance panel was established at the DSB meeting on 30 July.  The US is challenging Japan’s compliance with the DSB rulings against Japanese quarantine measures on US apple imports. The compliance panel will examine the WTO consistency of Japan’s revised measures.  Australia, the EC, New Zealand, Chinese Taipei and China are third parties.  Simultaneously, the US requested DSB authorisation to retaliate against Japan for non-compliance in this dispute, at a level of USD143 million.  Japan has objected to the proposed level of retaliation, and the matter will be referred to arbitration pending the outcome of the compliance panel.) 

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

No new developments.  (The first oral hearings in this dispute were held in Geneva on 2 and 3 June.  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. 

Australia’s oral statement as a third party to the dispute

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

No new developments.  (The final Panel Report was released to the Parties, Brazil and the US, on 18 June, on a confidential basis.  Media reporting suggests that the Panel ruled in Brazil’s favour in this dispute.  The Panel’s report will be released to Third Parties and the public once it has been translated; this is expected shortly. This dispute concerns a challenge by Brazil with regard to US cotton subsidies under the Agriculture Agreement, the Subsidies Agreement and GATT 1994.  The US has already indicated that it will appeal the panel ruling to the Appellate Body.  Australia is one of thirteen third parties.)

Australia’s submissions to the Panel

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)

No new developments.  (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.)

Meetings of the Dispute Settlement Body

DSB Meeting – 31 August 2004 

Indonesia requested the establishment of a panel to examine its complaint against Korea with regard to anti-dumping duties on imports of certain paper products (WT/DS312). Korea exercised its right to block that first request. The reports of the Appellate Body and the Panel in US:  Final dumping determination on softwood lumber from Canada (WT/DS264) were adopted (see item in Recent Developments above). The next meeting of the DSB will be held on 27 September 2004.

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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.