WTO Dispute Settlement Bulletin
Monthly Bulletin: July 2006
Australia and WTO dispute settlement
In this issue
- Appointment of New WTO Appellate Body Member
- Australia as a Complainant
- Australia as a Respondent
- Australia as a Third Party: Selected Disputes
- Meetings of the Dispute Settlement Body
- WTO Dispute Settlement: Developments of Interest
On 31 July, The WTO Dispute Settlement Body (DSB) appointed Mr David Unterhalter of South Africa to the seven-member Appellate Body to replace the late Justice John Lockhart of Australia who passed away in January this year. Mr Unterhalter will serve the remainder of Justice Lockhart's term of office, ie up to 11 December 2009.
There are no current disputes at panel or appellate body phase in which Australia is a complainant
Australia: Certain Measures Affecting the Importation of Fresh Fruit and Vegetables (WT/DS270)
No new developments. A panel was established in August 2003 at the request of the Philippines 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 at the request of the European Communities but has not yet been composed.
Turkey: Measures Affecting the importation of rice (WT/DS334)
A panel was established on 17 March, at the United States' request, to examine the United States' complaint about Turkey's import restrictions on rice. The complaint concerns Turkey's rice import licensing arrangements and import quota system which require importers to purchase specified quantities of domestic rice in order to be permitted to import rice under tariff-rate quotas. The panel was composed on 31 July 2006. Panel members are Ms Marie-Gabrielle Ineichen-Fleitsch, Mr Johann Frederick Kirsten, Mr Yoichi Suzuki.
Australia, China, the European Communities, Korea, Thailand, Argentina and Egypt have reserved their rights to participate as third parties to this dispute.
European Communities: Measures Affecting the Approval and Marketing of Biotech Products (WT/DS291, 292 and 293)
We understand that the panel's confidential final report has been circulated to parties. Australia, as a third party, will only be formally notified of the panel's findings when the final report is circulated to all WTO Members, which is expected by the end of September 2006.
United States/Canada: Continued Suspension of Obligations in the EC Hormones Dispute (WT/DS320 and WT/DS321)
Panels - established at the February 2005 DSB meeting at the request of the European Communities (EC) - continue to consider these two separate but related disputes. On 20 January 2006, the Chairman of the panels informed the DSB that due to the complexity of the dispute and the matters involved, the panels would not be able to complete their work within 6 months. Based on this, we do not expect the final reports to be circulated to all WTO members until late 2006.
In September 2005, parts 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. At the request of the parties in the disputes, the panels have also agreed to open their proceedings with the parties and scientific experts on 27-28 September and with the parties on 2-3 October 2006 for observation by WTO Members and the general public via closed-circuit broadcast to a separate viewing room at WTO Headquarters in Geneva.
The disputes relate to the WTO-consistency of the continued retaliation by the United States and Canada, despite EC claims of compliance with the findings in the European Communities - Hormones disputes. Australia is a third party to both disputes.
European Communities: Selected Customs Matters (WT/DS315)
The US has appealed the Panel's decision, which was circulated on 16 June 2006. This dispute was brought by the United States (US) against two alleged elements of the European Communities' (EC's) administration of its customs laws: the lack of uniform administration of the EC's laws, and the lack of an EC tribunal or other procedure for the prompt review and correction of customs administrative actions whose decisions apply throughout the EC. Australia participated as a third party in the dispute given our systemic interest in the issues raised.
The panel found its terms of reference prevented it from considering US challenges to the design and structure of the EC's system as a whole. The panel nevertheless described the EC customs system as complicated, opaque and confusing.
The panel rejected most of the specific US complaints related to:
- the prompt review and correction of administrative action (finding that Article X:3(b) of GATT does not require that review of decisions taken by customs adminstrations should have effect throughout the territory of a WTO member;)
- allegations of non-uniform administration of the customs system with regard to audit procedures following release of products into the European Union;
- substantive differences in penalty laws between Member states, alleged non-uniform administration of processing under customs control and local customs clearance procedures.
The Panel upheld three US claims, finding that:
- the classification of LCD monitors and blackout drapery lining amounted to non-uniform administration of customs laws in breach of GATT Article X:3(a)
- the EU was failing to ensure administration of its customs law on successive sales in a uniform manner
- differing classification of LCD Monitors in individual EC Member States resulted in differing tariffs being applied
See: The Panel's report on the WTO website at: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds315_e.htm
See: Australia's oral statement on the DFAT website at:
Other third parties in the dispute were 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)
There have been no further developments in either of these disputes since the DSB Meeting held on 17 May. The Panel has agreed to the parties' request to set aside the timetable for these disputes. At this stage, this issue is suspended from consideration by the DSB.
Australia, Brazil, Canada, China, Japan and Korea are third parties to both disputes.
See item below (WT/DS347) on the second panel established to examine EC measures.
European Communities and Certain Member States: Measures Affecting Trade in Large Civil Aircraft (Second Complaint) (WT/DS347)
The second panel requested by the United States to examine additional EC measures was established on 9 May 2006 (see Monthly Bulletin, May 2006). The Panel was composed on 17 July 2006 and an organizational timetable was agreed between the parties. Third Party written submissions are due on 23 January 2007, with the oral hearings on 27-28 February 2007.
Australia, Brazil, Canada, China, Japan and Korea have reserved their third party rights.
Brazil - Measures Affecting Imports of Retreaded Tyres (WT/DS332)
A panel, established in January 2006 at the request of the European Communities (EC), continues to examine the WTO-consistency of Brazilian ban on the import of retreaded tyres from all but Mercosur (Southern Common Market) member-countries. The EC alleges the ban is in breach of GATT obligations under Article I:1 (on grounds that the Mercosur imports are exempted); Article III:4 (on grounds that an internal fine levied on imported retreaded tyres is not applied to domestic retreaded tyres); Article XI:1 (on grounds of the prohibition on importation) and XIII:1 (on grounds the prohibition is applied in a discriminatory manner). Brazil has indicated that it will seek to justify the measures as being necessary, consistent with GATT Article XX(b) and (d). These provisions permit Members to derogate from substantive GATT provisions in order to protect `human, animal or plant life or health', and to secure compliance with domestic laws and regulations that are not inconsistent with the GATT.
Australia is participating as a third party in this dispute, as are Argentina, Japan, Korea, the United States, China, Cuba, Guatemala, Mexico, Paraguay, Chinese Taipei and Thailand. Australia made a brief oral statement to the panel at the Third Party Session on 6 July 2006.
Chile - Price Band System and Safeguard Measures Relating to Certain Agricultural Products -Recourse to Article 21.5 (WT/DS207)
A panel was established in January 2006 at the request of Argentina to examine the WTO-consistency of Chilean price band mechanisms applying to certain agricultural products, which replaced mechanisms found previously to be WTO-inconsistent under Article 21.5 of the DSU. An oral hearing for third parties will take place on 2 August. Australia will make an oral statement. The Panel is expected to complete its work by late 2006.
Australia has reserved its right to participate as a third party in this dispute, following participation as a third party at the original panel and Appellate Body stages of the dispute. Columbia, the European Communities, the United States, China, Brazil, Peru, Canada and Thailand also reserved their third party rights.
DSB Regular Meeting - 19 July 2006
At the DSB regular meeting on 19 July, a panel was established in the United States (US) - Anti-Dumping Measure on Shrimp from Ecuador dispute. Thailand, India, the European Communities (EC), Brazil, Korea, China and Japan joined the dispute as Third Parties. A 21.5 compliance panel was also established in Antigua and Barbuda's gambling dispute against the US. China, Japan and the EC joined as Third Parties. The EC claimed to have fully complied in its dispute with Brazil and Thailand over customs classifications of frozen boneless chicken cuts, with the adoption of an EC Regulation on the day of expiry of the Reasonable Period of Time.
Next DSB Meetings
A regular DSB meeting is scheduled for 1 September 2006.
No new Panel or Appellate Body reports were circulated during July. Previous reports are available on the WTO website