Australia and WTO dispute settlement

Monthly Bulletin - December 2003

In this issue

Recent Developments

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

The Panel issued its report on 1 December 2003, upholding India’s complaint that provisions of the EU’s Generalised System of Preferences (GSP) scheme benefitting twelve developing countries pursuant to its “Drug Arrangements”were in violation of its WTO obligations.  These arrangements were based on the view that additional trade preferences to such countries support the promotion of alternative economic activities. Pursuant to the scheme, a number of developing countries having serious illicit drug production problems benefitted from additional tariff preferences. The Panel upheld India’s claim that the arrangements discriminated against other developing countries. One panelist dissented. Seventeen developing countries (including the beneficiaries of the drug arrangements) as well as the US were third parties to this dispute.

Australia as a Complainant

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

Australia, Brazil and Thailand have requested the WTO Director-General to compose the panel, following the failure to reach agreement with the EC on panellists. A panel should be composed before the end of 2003. A panel would take between six and nine months to issue its report.

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

No new developments.  The reasonable period of time for implementation of Panel and Appellate Body reports will expire 27 December 2003.

European Communities: Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs (WT/DS290/1)

No new developments. Discussions on panel composition are continuing.

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. 

Australia: Quarantine Regime for Imports (WT/DS287)

No new developments. Discussions are underway on panel composition.

Disputes Involving Australia as a Third Party

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

No new developments.  Discussions on panel composition are continuing.

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

The Panel expects to issue the final report to parties in February 2004.  See Australia’s third party submission

US:  Subsidies on Upland Cotton (WT/DS267)

The panel report is expected to be issued mid to late 2004. See Australia’s submissions to the Panel.

Mexico: Measures Affecting Telecommunications Services (WT/DS204)

Due to translation delays, the Panel expects to complete its work by the end of December 2003. 

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

Despite the entering into force of a new EU Directive on the EC import prohibition on hormones in October 2003, Canada and the US remain unconvinced that this brings the EC into compliance with the Panel and Appellate Body rulings in this dispute. At the 1 December DSB meeting, the EC indicated that these Members should initiate proceedings to determine whether or not the EC was in compliance. Canada and the US stated that they were willing to discuss compliance and stand by their intention to maintain the suspension of concessions on the basis that the EC had still not made its import prohibition regime WTO-consistent.

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

No new developments. 

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

No new developments. 

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

On 26 November, the Appellate Body issued its report, upholding Panel findings that Japan’s quarantine restrictions on apples imports from the US were inconsistent with provisions of the SPS agreement. The special DSB meeting on 10 December adopted the Panel and Appellate Body reports.

Meetings of the Dispute Settlement Body: December 2003

The next regular DSB meeting is scheduled for 23 January 2004.

General DSB Meeting - 1 December 

The debate over EC compliance with Panel and Appellate Body rulings in EC-Hormones continued. At the previous DSB meeting, the U.S. and Canada had informed the meeting that in their view, EC measures remained inconsistent, despite the introduction of the EU Directive aimed at bringing the EC import regime into compliance. At the 1 December meeting, the EC suggested that the U.S. and Canada should initiate proceedings under dispute settlement rules to determine whether the EC was in compliance. (see item in Disputes involving Australia as a Third Party above).

The EC signalled that it was ready to resort to retaliation in the face of continued non-compliance by the U.S. in US –Anti-Dumping Act of 1916 while Japan indicated that it was contemplating resuming the suspended arbitration on its request for retaliation in this dispute.

Korea made first requests for the establishment of panels to consider its complaint against both the US and the EC with respect to countervailing duties against dynamic random access memory semi-conductors (DRAMS) from Korea. Both the US and EC respectively exercised their rights to refuse to agree to the establishment of the panels.

The 2003 Annual Report of the DSB was adopted at this meeting.

Special DSB meetings –10 December and 19 December

The DSB meeting on 10 December adopted the Panel and Appellate Body reports in US –Definitive Safeguard Measures on Imports of Certain Steel Products (WT/DS/248, 251, 252, 253, 254, 258, 259). The Appellate Body report was issued on 10 November, and upheld most of the Panel’s ruling on the inconsistency of the US measure with the Safeguards Agreement and GATT 1994. The eight co-complainants in this dispute welcomed the U.S. decision on 4 December to terminate all ten of the steel safeguard measures that were the subject of the dispute. At the 19 December meeting, the Dominican Republic exercised its right to refuse establishment of a Panel pursuant to the first request by Honduras with regard to the Dominican Republic’s measures concerning the importation and sale of cigarettes (WT/DS302/5). 

Dispute Settlement Understanding Review

Disputes under the WTO are governed by the WTO Dispute Settlement Understanding (DSU), established in 1995 under the WTO Agreement.  The DSU is central in ensuring that the international trading system of the WTO is open, equitable and enforceable.  It provides Members with the confidence that the commitments and obligations contained in the WTO agreements will be respected. 

The DSU has been under review since 1999.  The DSU Review provides Members with the opportunity to improve and clarify the existing dispute settlement system.  Ministers in Doha set a deadline of May 2003, but negotiations were unable to reach a conclusion and the deadline has been extended until May 2004.  Over 40 formal proposals have been submitted to the Review.  They cover issues such as streamlining and time savings, enhancing the rights of third parties to disputes, enhanced transparency in dispute settlement proceedings, revised Panel composition procedures, clarifications to the process of determining failure to implement Panel or Appellate Body recommendations and subsequent retaliation procedures, changes to Appellate Body procedures, and further consideration or clarification of special and differential treatment for developing countries, among others. 

Members’views vary widely as to how much the DSU should be changed, and where changes are in fact needed, resulting in a slow and cautious process. Australia’s view is that the DSU has been for the most part functioning well.  Accordingly, the Review should focus on practical changes which address significant systemic problems that have been demonstrated by the last nine years experience of dispute settlement under the WTO.

Subscribe

To subscribe please send an email to wto.disputes@dfat.gov.au with "subscribe" in the subject line and your contact details in the body of the email. If you want to be removed from the mailing list please send an email to wto.disputes@dfat.gov.au with "unsubscribe" in the subject line.      

This publication is intended to provide a general update and the information within it should not be relied on as complete or definitive.