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WTO Dispute Settlement Bulletin

Monthly Bulletin: January 2001

Australia and WTO dispute settlement

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Australia
as a Complainant

Korea: Measures affecting imports of fresh, chilled and frozen beef
(WT/DS169)

Last year the Appellate Body
upheld an earlier complaint by Australia against Korea's regime in regard to
imported beef. The panel and Appellate
Body reports were adopted by Members of the WTO at a special meeting of the DSB
on 10 January 2001. Australia's
statement at this DSB meeting registered its expectation that the dual retail
system would need to be removed and its readiness to engage in constructive
dialogue with Korea on prompt implementation. The full text of Australia's statement is set out below.

At the next meeting of the DSB (1
February 2001) Korea is expected to confirm that it intends to comply with the
DSB recommendations and rulings and that it requires a reasonable period of
time to comply.

United States: Safeguard measure
on imports of fresh, chilled and frozen lamb meat (WT/DS177 and WT/DS178)

The panel's final report,
released on 21 December 2000, found against the safeguard tariff measures
imposed by the United States on Australian and New Zealand lamb exports. The US has filed an appeal.

United States: Continuing Dumping and
Subsidy Offset Act of 2000 (WT/DS217) (Joint consultation request)

On December 21 2000 Australia and
eight other Members jointly requested dispute settlement consultations with the
US over the US trade remedy legislation that, inter alia provides for dumping
and subsidy offsets the Byrd Amendment.
In January, three further Members (Canada, Argentina and Mexico) made
requests to join the consultations.
Consultations will be held in February 2001.

Disputes
involving Australia as a Third Party

Chile: Measures affecting the
transit and importation of swordfish (WT/DS193)

Following recent bilateral
negotiations between the EC and Chile, the parties have reached a settlement to
resolve this dispute and have agreed to suspend current WTO panel
proceedings. A panel had been
established in December.

EC: Beef hormones (WT/DS26)

No new developments since last update.

United States: Restrictions on
shrimps (the shrimp/turtle" case) (WT/DS58)

A panel to examine the WTO consistency of the revised US
measures was established on 23 October 2000.
The panel met with parties and third parties in sessions on 23 and 24
January 2001. Australia supported
Malaysia's claim that the US had failed to comply with DSB recommendations and
rulings to bring its inconsistent measure (the import prohibition on certain
shrimp) into conformity with its WTO obligations.

Canada: Dairy Assistance Measures (WT/DS103)

Canada has until 31 January 2001,
as a result of consultations resulting in an extension of the implementation
deadline by one month, to bring its dairy export arrangements (including
measures at provincial level) into conformity with its WTO obligations.
Canada's recent status report affirms that it will be in full compliance by the
conclusion of the reasonable period of time on 31 January 2001.

United States:
"Homestyle" Copyright Legislation (WT/DS160)

In an award issued on 15 January
2001, a WTO arbitrator has determined that the reasonable period of time for
United States to implement the recommendations and rulings in the panel report
on section 110(5) of the US Copyright Act is 12 months from the adoption of the
report. This period will expire on 27 July 2001.

United States: Safeguard measures
on wheat gluten (WT/DS166)

On 19 January 2001, the DSB
adopted the Appellate Body report, and the panel report, as modified by the
Appellate Body. Australia's statement to the meeting is set out below.

United States: Measures treating
export restraints as subsidies (WT/DS194)

No new developments since last update.

United States: Definitive
safeguard measures on imports of circular welded carbon quality line pipe from
Korea (WT/DS202)

No new developments since last
update.

United States: Foreign Sales
Corporations (FSC) taxation measures (WT/DS108)

No new developments since last
update.

Disputes in
which Australia has a Policy or Economic Interest

Japan: Varietal testing of horticultural products (WT/DS76)

The United States and Japan
continue to negotiate on replacement arrangements. On 19 January 2001, Japan presented it twelfth status report in
which it advised that it expects that Japan and the US will reach a mutually
satisfactory solution in the near future.
Japan's implementation is listed on the agenda for the 1 February meeting
of the DSB.

EC: Bananas (WT/DS27)

The latest EC status report confirms its intention to
proceed with a rapid implementation of its first-come, first-served system
described in the EC's report as the WTO-compatible new import regime. As with previous meetings, the EC's report
is expected to draw the usual round of critical comments from interested
members.

EC: Measures on asbestos (WT/DS135)

The Appellate Body is expected to
report by 12 March 2001, as a result of the extension of the appeal timeframes.

United States:
Import measures on certain products from the EC (WT/DS165)

The Appellate Body report and the
panel report, as modified by the Appellate Body, were adopted by the DSB on 10
January 2001.

Brazil: Measures Affecting Patent
Protection (WT/DS199)

On 8 January 2001 the US
requested a panel in respect of a complaint concerning Brazil's patent
system. Brazil exercised its right to
prevent the establishment of a panel on the first occasion for DSB
consideration of a request. The US has
placed this item on the agenda for the 1 February DSB meeting. Brazil is not able to prevent the
establishment of a panel at this meeting.

United States: Section 129(C)(1) of the Uruguay Round Agreements Act
(WT/DS221) (Consultation request)

On 17 January 2001 Canada requested consultations with the
US concerning section 129(c)(1) of the Uruguay Round Agreements Act (URAA) and
the Statement of Administrative Action accompanying the URAA. Canada considers that the US measures are
inconsistent with obligations of the US under the Anti-Dumping and Subsidies
and Countervailing Measures Agreements.

European Communities: Tariff rate quota on corn gluten feed from the United
States (WT/DS223) (Consultation request)

On 25 January 2001 the US requested consultations with the
EC with respect to the application by the EC of a tariff rate quota (TRQ) on
corn gluten feed imported from the US following the adoption of the Appellate
Body report on wheat gluten (see above).
The US considers that the imposition of the TRQ on corn gluten feed
imported from the US is inconsistent with particular obligations under GATT
1994 and the Safeguards Agreement.

Meetings
of the Dispute Settlement Body: January 2001

The DSB, consisting of all the
members of the WTO, met twice in January in two special sessions on 10 and 19
January 2001. The next regular DSB
meeting will be held on 1 February 2001. Australia uses DSB meetings to monitor progress and to register its
views on disputes of interest. The agendas of the meetings were as follows (any
Australian interventions are indicated):

Special DSB Meeting 10 January 2001

1. Korea Measures affecting imports of
fresh, chilled and frozen beef (WT/DS169)

Australia's
statement follows:

Australia welcomes adoption of the reports and wishes to
thank the Panel and Appellate Body, as well as the Secretariat, for its work.

Australia is pleased that a large range of measures which
have discriminated against Australian beef in the Korean market will have to be
eliminated or brought into WTO conformity.

There are two distinct elements to implementation: (1) the
measures identified in Korea's schedule, which have benefited from a 7 year
transitional period expiring on 1 January 2001; and (2) the dual retail system
and certain requirements and practices of Korean beef regulatory authorities.

In regard to the measures benefiting from the 7 year
transitional period, Australia is assessing the regulatory changes recently
gazetted by Korea and requests early confirmation from Korea that it has
repealed all relevant regulations relating to:

  • the price mark-up
    applied to imports through the SBS system,
  • the limitations on
    participation in the SBS system,
  • the requirement that
    beef imported through the LPMO be distributed only on the wholesale market,
  • the LPMO's minimum
    wholesale price,
  • and the discretionary
    licensing system.

In regard to the other measures found to be inconsistent,
Australia is satisfied that the Panel and Appellate Body recognised the
discriminatory effect of dual retailing of imported beef. Australia has some reservations about the
Appellate Body's reasoning that formal separation of imported and domestic
products at the retail level may not necessarily give rise to an inconsistency
with Article III of GATT 1994. However this reasoning cannot in any way provide
scope for Korea to exclude imported beef from outlets in which domestic beef is
sold to the Korean consumer.

Australia also welcomes the findings in regard to certain
requirements and practices of Korean regulatory bodies.

In regard to domestic support levels, Australia notes that
the Appellate Body has upheld the Panel findings that Korea's domestic support
for beef in 1997 and 1998 was incorrectly calculated. The reasoning behind the findings should assist all WTO Members
in the calculation of agricultural support and in undertaking the review of the
implementation of commitments under Article 18 of the Agriculture
Agreement.

The Panel and Appellate Body reports serve to clarify the
key elements of calculating the level of domestic support subject to reduction
commitments - for example, that the calculation of domestic support should be
based on the production eligible to receive the applied administered price and
not the actual quantity purchased.
Australia believes that such an approach will ensure that the AMS on
individual products will more accurately reflect the economic impact of support
mechanisms.

The reports also clarify that, in circumstances where a
product is not part of the base AMS calculation, the current AMS should be
calculated in accordance with Annex 3 of the Agreement on Agriculture. The use
of Annex 3 as the guiding methodology should lead to a more consistent approach
by WTO Members to the calculation of domestic support.

Finally, Australia looks forward to receiving advice from
Korea within the next 30 days of its intentions in respect of implementation,
as provided for in Article 21.3 of the Dispute Settlement Understanding. Australia stands ready to engage in constructive
discussions with Korea on prompt implementation.

2. United
States - Import Measures on certain products from the European Communities(WT/DS165)

Special
DSB Meeting 19 January 2001

1.
United States Definitive safeguard measures on imports
of wheat gluten from the European Communities
(WT/DS166/R & WT/DS166/AB/R)

Australia's statement
follows:

Mr Chair, I shall
restrict my comments today to a systemic issue arising from the Panel and
Appellate Body reports on Wheat Gluten.

Safeguard action is
something that Members can only legitimately take in exceptional
circumstances. The impact that
safeguard measures have on trade is far reaching given that it applies to
imports from all sources. Indeed, such
action is far more disruptive than other trade remedies, i.e. anti-dumping and
countervailing.

It is essential that
the rigour of the obligations set out in the Safeguards Agreement and
Article XIX of GATT 1994 is maintained.
Any weakening of those obligations would risk a break out on safeguards.

My delegation was
disappointed that the Panel's articulation of the approach to the determination
of causation was not confirmed by the Appellate Body. This would have provided greater guidance and certainty to all
Members about how to handle investigations.

Of course the
substantive obligation to demonstrate causation has not changed. However, further guidance on the issues
will be required to ensure that competent authorities make proper findings on
the existence of the causal link so that recourse to safeguard measures is
limited strictly to the exceptional circumstances set out in the Safeguards
Agreement and Article XIX.

2.
Brazil Measures affecting patent protection (WT/DS199)

Managing
WTO Disputes: Institutional Arrangements

As advised in our earlier Bulletins, the Department has
established the Trade Law Branch in the Trade Negotiations Division. The Branch includes additional resources for
Australia's participation in WTO disputes. The Branch takes the lead role in initiating and defending Australia in
WTO disputes.

Assistance to exporters and
industry groups on WTO issues is provided through the WTO Disputes Investigation and Enforcement Mechanism launched by Mr
Vaile in 1999. Under the Mechanism, any Australian exporter can
seek Government support and assistance in circumstances where other WTO Member
governments may not be honouring their obligations under the WTO
Agreements. The Mechanism sets up a
partnership between exporters and the Government to exercise Australia's WTO
rights for the benefit of exporters, and Australia as a whole. Assistance via the Mechanism is available to
all actual or would-be exporters whether as individual entities or as industry
associations, no matter the exporter's size or the product specialisation. There is no pre-qualification level for
access or any charge for use of the mechanism.

The Trade Law Branch is also
available to advise State and Territory Governments on the WTO aspects of State
and Territory proposals or measures involving the use of trade or trade related
actions.

Resources permitting, the Trade Law Branch will consider
requests to address business, community and educational groups with an interest
in the WTO generally, the rights and obligations of WTO membership, the WTO's
dispute settlement system and the WTO Disputes Investigation and Enforcement
Mechanism.

For more information or for assistance, contact us at
wto.disputes@dfat.gov.au
.

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The Monthly Bulletin is an overview of Australian involvement
in WTO Dispute Settlement from the WTO Trade Law Branch of the Department of
Foreign Affairs and Trade . It updates Australian involvement in specific WTO
disputes and, more generally, in disputes in which Australia has a policy or
economic interest. Also included are the agendas of meetings of the WTO Dispute
Settlement Body (DSB), with specific reference to any Australian interventions.

For more information and copies of previous issues, visit Australia and WTO
dispute settlement
.

For more general information relating to the Doha
Round of Trade negotiations, see the WTO
Doha Round Bulletin
.

Last Updated: 9 January 2013
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