Australia and WTO dispute settlement

Monthly Bulletin
November 2003

In this issue


Recent Developments

United States: Definitive Safeguard Measures on Imports of Certain Steel Products (WT/DS/248, 249, 251, 252, 253, 254, 258, 259)

The DSB Appellate Body on 10 November issued its report in this dispute, brought by Brazil, China, the EC, Japan, Korea, New Zealand, Norway and Switzerland. The Appellate Body upheld most of the Panels ruling on the inconsistency of the US measure with the Safeguards Agreement and GATT 1994. Some specific findings by the Panel with regard to tin mill and stainless steel wire products were reversed, with little effect on the overall result. It is expected that the Appellate Body report will be adopted by the DSB at its 1 December meeting.

Australia: Quarantine Regime for Imports (WT/DS287)

At the 7 November DSB meeting, a panel was established to examine the European Communities challenge to Australia's quarantine regime for imports. Australia's statement to the DSB is attached at Annex A.

Australia as a Complainant

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

No new developments. Discussions on panel composition are continuing.

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

No new developments.

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

A single panel was established at the 2 October DSB meeting in response to requests by Australia and the US to examine EC legislation covering the registration and protection of geographical indications (GIs) on a range of foodstuffs and agricultural products. 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. Discussions on panel composition are continuing.

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

No new developments.

Australia: Quarantine Regime for Imports (WT/DS287)

See item in Recent Developments above.

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 Chairman of the Panel issued a statement that, due to the three week suspension requested by the US following the preliminary ruling by the Panel and the harmonisation of the Panel with the work of another Panel established on this matter, there will be a delay in issuing the final report. The Panel expects to issue the final report to parties in February 2004. Australia's third party submission is available at: http://www.dfat.gov.au/trade/negotiations/disputes/wto_disputes-3rd_party_table.html

US: Subsidies on Upland Cotton (WT/DS267)

A further meeting of the Panel with third parties was held on 8 October. The panel report is expected to be issued mid to late 2004. Australia's submissions to the Panel are available at http://www.dfat.gov.au/trade/negotiations/disputes/wto_disputes-3rd_party_table.html

Mexico: Measures Affecting Telecommunications Services (WT/DS204)

No new developments. Due to translation delays, the Panel now expects to complete its work in December 2003.

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

The EC notified the DSB at its 7 November meeting that it has introduced a Directive on its import prohibition on hormones, aimed at implementing the DSB ruling in this dispute. It made clear that consequently, it expects Canada and the US to terminate their suspension of concessions to the EC in accordance with dispute settlement rules. The EU Directive entered into force 14 October 2003.

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. Media reports indicate that the U.S. is taking domestic action to bring the relevant measure into compliance with its WTO obligations.

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

Japan has appealed the Panels rulings in this case. The Appellate Body has indicated that it expects to circulate its report in this appeal towards the end of November 2003. Australia lodged a third party submission in this appeal. The executive summary of Australia's submission is available at http://www.dfat.gov.au/trade/negotiations/disputes/wto_disputes_japan_importation_apples.html

Meetings of the Dispute Settlement Body: November 2003

The Dispute Settlement Body (DSB) met on 7 November (General DSB meeting). The DSB will meet on 21 November to consider the request for the establishment of a Panel by Thailand in European Communities customs classifications of frozen boneless chicken cuts (WT/DS286/5). The next regular DSB meeting is scheduled for 1 December.

General DSB Meeting - 7 November

The DSB established a panel in the ECs challenge to Australia's quarantine regime (see item in Recent Developments above). Brazil made a second request for a panel in European Communities Customs Classification of Frozen Boneless Chicken Cuts and a panel was established. Chile, China, Thailand and the US reserved their third party rights. The first request by Thailand for establishment of a Panel on the same issue was blocked by the EC. A new Appellate Body Member, Professor Merit Janow was appointed for a four year term and the DSB reappointed three existing Members. For more detail on the 7 November DSB meeting, visit the WTO website at http://www.wto.org/english/news_e/news03_e/dsb_7nov03_e.htm.

Annex A

Dispute Settlement Body 7 November 2003

Item 3 : Australia Quarantine Regime For Imports Request For The Establishment Of A Panel By The European Communities (WT/DS287/7/Rev.1)
Statement by Australia

Mr Chairman, Australia is disappointed with the European Communities decision to press ahead with this matter. Australia's quarantine system is entirely WTO consistent, and we believe that this will ultimately be supported by a panels findings.

Nevertheless, we would like to register again our serious concerns about the potential harm which the challenge poses for the carefully negotiated balance reflected in the SPS Agreement and the ability of many Members, not just Australia, to maintain quarantine systems which address their particular circumstances while meeting their international obligations.

We also continue to question the ECs motivations in bringing this challenge. To a very large extent, it does not appear to be about commercial considerations and securing greater market access for products from Member States of the European Communities. For a number of products referred to in the request, we have no record of Member States of the European Communities having previously expressed any interest in exporting to Australia. From our perspective, the most likely reason there has been no previous expression of interest is because no significant commercial interest exists in relation to those products.

We would therefore be concerned if this challenge forms part of a strategy to alter the central principles of the Sanitary and Phytosanitary Agreement or which would threaten to undermine the ability of all Members to design an appropriate quarantine system to protect animal or plant life or health.

Implicit in the European Communities panel request is the apparent view that the SPS Agreement requires all WTO Members to carry out risk assessments for all possible traded plant and animal products from all possible sources, regardless of the existence or expression of any commercial interest. This is an onerous requirement for any government and one which we do not believe is contained in the SPS Agreement. Many Members, both developed and developing, would find it extremely difficult to apply the SPS Agreement in such a theoretical and impractical way.

As in other areas, the European Communities seems to consider that the approach which it takes to quarantine is the only permitted model for a quarantine system. This ignores the fact that the European Communities has a vastly different trading history and pest status to many countries, including Australia. It also ignores the fact that the SPS Agreement was intended to establish a framework within which Members could design a quarantine system to meet their particular circumstances. Many Members maintain systems which are similar to that of Australia and which may be affected by this dispute. Australia does maintain a conservative approach to quarantine matters, but it is one which is entirely WTO consistent and reflects our rights and obligations under the SPS Agreement.

Mr Chairman, we note that the panel request set forth in WT/DS287/7/Rev.1 contains an additional substantive legal claim which was not part of the original document DS287/7, and that this request is therefore effectively a new request for panel establishment, and not merely a revised one. As this is the first DSB consideration of the ECs new request, Australia would be entitled to prevent the establishment of the panel at this meeting.

However, given the existence of a previously established panel to examine a complaint related to the same matter, that is, the Panel established by the DSB on 29 August to examine the Philippines complaint on Australia's quarantine measures (WT/DS270 refers), and with a view to facilitating the application of Article 9 of the Dispute Settlement Understanding in a practical manner, Australia is prepared to accept the establishment of this panel at this meeting.

Mr Chairman, due to the very broad, unspecific and open-ended nature of the challenge, we recall our previous statement in this forum indicating that the European Communities request for establishment of a Panel in WT/DS287/7 was insufficient to satisfy Article 6.2 of the Dispute Settlement Understanding. These concerns have not been addressed in the new request contained in WT/DS287/7/Rev.1 and we reserve our rights to raise these concerns before the panel.


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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.

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