Australia and WTO Dispute Settlement
WTO: LAMB
Questions and Answers
When can we expect the US to lift the import restrictions?
The ball is now in the US’s court to advise how it will comply with the WTO rulings.
Under WTO rules, if the US is unable to comply immediately, it can elect to do so within a reasonable period of time, which it has to negotiate with Australia (and New Zealand). If those negotiations fail, the matter can be referred to arbitration which will set a deadline for implementation. Australia will be urging the US to lift the restrictions within the shortest period possible.
What are Australia’s options if the US refuses to comply with the WTO rulings?
We expect the US to comply with the WTO rulings. To do otherwise would weaken the effectiveness of the WTO dispute settlement system in which all WTO members have an important stake. In the event the US does not implement the rulings, it would be open to Australia to seek compensation from the US or, if there is no agreement, to take retaliatory action. But this is not Australia’s preferred option. It is premature to talk about retaliation.
What happens if the US replaces the current import restrictions with some other measure which also limits Australian exports of lamb meat to the US?
The onus is on the US to comply with the WTO rulings and to take action to correct the measures which have been found to be illegal by a WTO dispute settlement panel and the Appellate Body. The WTO rulings do not specify how the US should comply. Australia would challenge any replacement measures introduced by the US if we thought they were inconsistent with WTO rules. Any such challenge would be through recourse to accelerated dispute settlement procedures.
If the US Administration removes the restrictions, won’t this run the risk of alienating some members of Congress that are important to the Administration’s efforts in securing trade promotion authority this year?
No. There are a range of ways in which the Administration can provide help to the US lamb sector without having to resort to import restrictions, provided such alternative forms of support are consistent with WTO rules, and with the commitment of both our countries to lowering market-distorting forms of support. Australia has argued consistently that the problems with the US lamb industry are essentially home-grown in nature and that imports have been used as an excuse for more fundamental domestic action.
Isn’t this case academic given that Australian exports of lamb meat to the US appear to have been largely unaffected by the US’s import restrictions?
It is true that Australian lamb meat exporters have been able to achieve increases in the value and volume of their exports to the US despite the restrictions (see below). That has been due to a number of factors, including the exchange rate of the $A and the continuing decline of the US lamb industry. Nevertheless, it is a fact that the tariffs applied by the US are a tax on Australian exports which have reduced the returns to the Australian industry. The Australian lamb meat industry calculates that the restrictions have cost it around $30 million.
US lamb meat imports from Australia
| Year | tonnes | value ($US million) |
| 1997 | 13,018 | 61.7 |
| 1998 | 17,142 | 68.3 |
| 1999 | 19,501 | 82.2 |
| 2000 | 23,560 | 101.2 |
Apart from the commercial benefits, winning this case is also important in ensuring that countries do not abuse so-called safeguards measures – WTO rules which allow for the introduction of temporary import restrictions in exceptional circumstances – for protectionist purposes. All countries, including the US because of its major stake in global trade, have a substantial interest in avoiding setting a precedent to other countries who may be under similar domestic protectionist pressures.
Will a resolution of this issue assist the Government’s efforts to commence negotiations on a bilateral free trade agreement with the US?
The two issues are quite separate. But we hope that, to the extent that we are able to ensure a prompt resolution of the lamb issue it will make a positive contribution to the atmosphere for serious engagement on bilateral issues across the board.
This page last modified: Monday, 16 September 2002 02:54:00 PM
Local Date: Sunday, 22 November 2009 11:38:28 AM