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Australia and WTO dispute settlement

Monthly Bulletin
September 2005

In this issue


Australia as a Complainant

European Communities: Export Subsidies on Sugar (WT/DS265/AB/R)

In August, Mr AV Ganesan of the Appellate Body was appointed to arbitrate on the period within which the EC has to implement the WTO findings. Under WTO rules the indicative outer period for WTO implementation is fifteen months from the date of adoption of WTO rulings (in this case 19 May 2005). Australia participated in oral hearings in Geneva on 10 October. Mr Ganesan's report is expected to be issued on 28 October.

The Appellate Body and Panel Reports in this dispute were adopted by the Dispute Settlement Body (DSB) in May. The Appellate Body upheld Australia's (and Brazil's and Thailand's) challenge to the European Communities' (EC) sugar export subsidies, ruling that, consistent with its WTO obligations on agricultural export subsidies, the EC must significantly limit its subsidised exports of sugar and reduce its annual expenditure on export subsidies.

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.)

Australia as a Third Party: Selected Disputes

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

No new developments. We understand that the release of the Panel's report has been delayed, and is not expected until early 2006.

United States/Canada: Continued Suspension of Obligations in the EC Hormones Dispute (WT/DS320 and WT/DS321)

Panels - established at the February DSB meeting at the request of the EC - continue to consider these two separate but related disputes . In September, part of the Panels' proceedings were open to observation by other WTO Members and the public, at the request of the parties to the dispute. This was the first time that proceedings of a WTO panel have been open to the public. The session for third party submissions to the panel remained closed, however, based on objections by some third parties.

The disputes relate to the WTO-consistency of the continued retaliation by the United States and Canada, despite European Communities claims of compliance with the findings in the EC - Hormones disputes. Australia is a third party to both disputes.

See:

United States: Tax Treatment for "Foreign Sales Corporations" (FSC) (WT/DS108/RW2)

The Panel's report was circulated on 30 September. The dispute relates to a request of the European Communities (in a second recourse to DSU Article 21.5) to examine the consistency of US measures replacing FSC export subsidy measures relating to agriculture and manufactured products previously found to be WTO inconsistent. Australia is a third party in the dispute, as are Brazil and China.

The panel found the US had failed to implement fully DSB recommendations and rulings requiring the US to withdraw the prohibited subsidies and to bring its measures into conformity with its obligations under the relevant covered agreements. The Panel made no new recommendation, since the DSB's original recommendations and rulings in 2000 remain operative through the results of the compliance proceedings in 2002.

European Communities: Selected Customs Matters (WT/DS315)

A panel, composed in May, continues to examine United States' claims that the European Communities customs law is applied in a non-uniform manner and that the EC does not maintain a forum for the prompt review and correction of administrative action relating to customs matters. Australia is a third party to the dispute, as are Argentina, Brazil, China, Hong Kong - China, India, Japan, Korea, and Chinese Taipei.

European Communities and Certain Member States/United States: Measures Affecting Trade in Large Civil Aircraft (WT/DS316 and WT/DS317)

On 23 September, the DSB initiated fact-finding procedures under the Subsidies and Countervailing Measures (SCM) Agreement Annex V in both the US- and EC - Aircraft disputes, at the request of the United States. The DSB also designated Mr Mateo Diego-Fernandez, deputy chief of the Mexican delegation to the WTO, as facilitator of the process. Questions to third-country Members have been circulated as part of the SCM Annex V procedures, with responses due on 11 November.

This followed the establishment in July of two panels to examine, respectively, the United States' complaint on the European Communities' subsidies to Airbus, and the European Communities' complaint regarding United States subsidies to Boeing. Australia has joined the disputes as a third party, together with Brazil, Canada, China, Japan and Korea.

Meetings of the Dispute Settlement Body

DSB M eeting : 27 September 2005

Australia, together with Brazil and Thailand, drew the DSB's attention to recent action by the European Communities (EC) (declassification of quota sugar) that will increase the EC's subsidised exports of sugar during the implementation period in the EC - Export Subsidies on Sugar dispute, contrary to the EC's WTO obligations and the implementation required in this dispute.

The DSB adopted the Appellate Body and Panel reports in the European Communities: Customs Classification of Frozen Boneless Chicken Cuts dispute, and the compliance report regarding United States Countervailing Duties on EC Steel. The DSB also formally approved the reappointment of Appellate Body members - Judges Luiz Baptista (Brazil), John Lockhart (Australia) and Giorgio Sacerdoti (EC) - for a second four year term, beginning on 12 December 2005.

Special DSB Meeting: 23 September 2005

At its 23 September special meeting, the DSB initiated fact-finding procedures under the Subsidies and Countervailing Measures (SCM) Agreement Annex V in both the US- and EC - Aircraft disputes (WT/DS316 and WT/DS317). at the request of the United States.

Next DSB Meeting

The next regular DSB Meeting will be held on 18 October 2005.

WTO Dispute Settlement: Developments of Interest

The following reports were circulated recently, and are available on the WTO website.

Mexico: Tax Measures on Soft Drinks and Other Beverages (WT/DS308/R) Panel report, circulated 7 October.

European Communities: Customs Classification of Frozen Boneless Chicken Cuts (WT/D2269/AB/R, WT/DS286/AB/R) Appellate Body Report, circulated 12 September.

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