Australia and WTO dispute settlement

Monthly Bulletin
November 2004

In this issue


Recent Developments

US – Sunset reviews of Anti-Dumping measures on oil country tubular goods from Argentina (DS268)

The Appellate Body issued its report in this dispute on 29 November. Argentina alleged that the US anti-dumping “sunset review” regime was inconsistent with provisions of the Anti-Dumping Agreement (ADA). “Sunset review” in the ADA refers to the practice of reviewing anti-dumping orders after five years, in order to determine whether their continued imposition is necessary. The Panel in this dispute found, inter alia, that the US was in breach of its obligations under the ADA with regard to the way in which US authorities determined the need to keep existing anti-dumping orders in place. This finding was reversed by the Appellate Body on the grounds that the Panel had not made a qualitative finding on the evidence presented and thus was not able to make a proper determination. The Appellate Body upheld some of the Panel’s findings, notably with regard to the inconsistency of the waiver provisions in the US law with ADA obligations to base conclusions on actual evidence (as opposed to assumptions.)

US – Measures affecting the cross-border supply of gambling and betting services (DS285)

The Panel issued its report in this dispute on 10 November. This dispute concerns a complaint by Antigua that various US laws addressing gambling and related activities were inconsistent with commitments taken by the US pursuant to the General Agreement on Trade in Services (GATS). Despite US arguments that it did not intend to make specific commitments for gambling, the Panel found that the way in which the US had listed its GATS commitments could properly be interpreted as encompassing gambling services. The Panel relied on past rulings of the Appellate Body in the context of tariff commitments pursuant to the GATT in its reasoning. Considering the exceptions provided for by GATS Article XIV for the first time, the Panel rejected the US defence that such laws were necessary on public morality grounds, placing particular emphasis on the failure of the US to exhaust alternative, WTO-consistent measures.

Dominican Republic – Measures affecting the importation and internal sale of cigarettes (DS302)

The Panel issued its report in this dispute on 26 November. Honduras challenged a number of measures imposed by the Dominican Republic on imported goods including cigarettes, alleging that they were inconsistent with the Dominican Republic’s tariff commitments and GATT obligations. The Panel upheld the majority of Honduras’ claims. For example, it held that the requirement that a tax stamp be affixed to all cigarette packets in the territory of the Dominican Republic, although formally applying to both domestically produced and imported cigarettes, in practice involved extra costs for imported products and was thus inconsistent with GATT Article III. On another claim regarding a foreign exchange fee imposed on all imports into the Dominican Republic, the Panel, after consultation with the IMF, rejected the Dominican Republic’s argument that the fee was an allowable exception as a measure envisaged by the IMF Articles of Agreement.

Australia as a Complainant

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

No new developments. The Panel report (MS Word) in this dispute was circulated on 15 October. The Panel found in favour of the complainants, Australia, Brazil and Thailand, holding that the export subsidy schemes on sugar granted by the EC are in breach of the EC’s obligations for the reduction of such subsidies under the Agriculture Agreement. The EC has indicated that it will appeal the decision.

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

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

The Panel’s confidential interim report was issued to the parties (Australia, the US and the EC) in November. The parties were allowed a time period for comment. The Panel report is expected to be finalised and publicly released early in 2005. 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.

See Australian submissions to the Panel, including written submissions and oral statements made to the Panel and answers to Panel questions.

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

The November DSB meeting authorised the requests of seven complainants in this dispute to retaliate against the US pursuant to the arbitration award issued on 31 August. 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 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 involving Australia as a Third Party

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

No new developments. Canada informed the October DSB meeting of its intention to implement the rulings and recommendations of the Panel against its grain handling practices (which were not appealed) noting that it would require a reasonable period of time to do so. The WTO Appellate Body report in this dispute was issued on 30 August, upholding the Panel’s findings that the US had failed in its claim that activities of the Canadian Wheat Board contravened Canada’s state trading enterprise obligations under the GATT 1994.

See Australia’s third party submission in the appeal.

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

No new developments. A third party session took place at the Article 21.5 compliance Panel hearing on 28 October. The US is challenging Japan’s compliance with the DSB rulings against Japanese quarantine measures on US apple imports. Australia, Brazil, the EC, New Zealand, Chinese Taipei and China are third parties. The Panel report is expected to be circulated to WTO Members and the public in late May 2005.

See Australia’s third party oral statement.

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

No new developments.  The Panel is considering 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. The Panel has estimated it will issue its final report to the parties by the end of June 2005.  Public circulation will follow after translation.

See Australia’s third party oral statement.

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

The EC has initiated consultations with the US and Canada in a new dispute that, if unresolved at consultations, will challenge the continued suspension of concessions and other obligations by the US and Canada in the Beef-Hormones dispute.

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

The US reported to the November DSB meeting on its implementation in this dispute, noting that the American Jobs Creation Act (AJCA) will enter into force on 1 January 2005. The EC has requested consultations for the establishment of an Article 21.5 “compliance panel” that would examine whether the AJCA would bring the US into compliance. The EC’s authorised programme of retaliatory measures entered into force on 1 March. This consisted of additional customs duties on selected US products, beginning at an initial rate of 5% and followed by monthly increases of 1%. The EC has said it will suspend these retaliatory measures once the AJCA enters into force while the Article 21.5 proceedings are underway.

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

This dispute concerns a challenge by Brazil with regard to US cotton subsidies under the Agriculture Agreement, the Subsidies Agreement and GATT 1994.  The Panel issued its final report to the parties on 8 September 2004. The US notified its Notice of Appeal of the Panel's ruling on 18 October 2004. Australia is a third participant in the appeal and lodged its Third Participant's Submission on 16 November 2004. 

See Australia's submissions to the Panel and the Appellate Body.

Meetings of the Dispute Settlement Body

DSB Meeting - 24 and 26 November 2004

The November DSB meeting authorised requests by seven Members who were complainants in the “Byrd Amendment” dispute (DS217 and DS234) for authorisation to retaliate against the US. Brazil, the EC, India, Japan, Korea, Canada and Mexico made authorisation requests pursuant to the arbitrator’s award issued in August as to the level of permissible retaliation. The US notified implementation in the 1916 Anti-Dumping Act dispute (DS136 and 162) and the Foreign Sales Corporation dispute (DS108) (see item above.)

The next meeting of the DSB will be held on 17 December.


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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