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WTO Dispute Settlement Bulletin

Monthly Bulletin: October 2005

About this publication

Australia and WTO dispute settlement

In this issue

Australia as a Complainant

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

Arbitration proceedings to decide the European Communities' (EC) reasonable period of time (RPT) for implementation in the EC - Exports Subidies on Sugar dispute were finalised on 28 October. The arbitrator (Mr AV Ganesan of the Appellate Body) determined that the European Communities must implement the recommendations and rulings of the dispute by 22 May 2006 - an implementation period of 12 months and 3 days. The ruling requires the EC to reduce its subsidised exports of sugar to its WTO-scheduled limits of 1.273 million tonnes a year and its annual expenditure on sugar export subsidies to 499.1 million Euros.

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' sugar export subsidies, ruling that all European Union (EU) sugar exports were subsidised and that the EU was not entitled to exclude any of those quantities nor any budgetary outlays on export subsidies from its WTO-scheduled export subsidy commitments.


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 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.


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 was a third party in the dispute, as were 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)

Fact-finding procedures continue in both these disputes. These procedures were initiated by the DSB in September under the Subsidies and Countervailing Measures (SCM) Agreement Annex V at the request of the parties. Mr Mateo Diego-Fernandez, deputy chief of the Mexican delegation to the WTO, has been designated 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 18 November.

This process 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 Meeting: 18 October 2005

Brazil's request for DSB authorisation to take countermeasures against the United States was referred to arbitration as a result of the US's objection to the level proposed (USD 1.037 billion annually). Brazil's request followed the US's failure to withdraw or remove the adverse effects of the actionable subsidies found WTO-inconsistent in the United States - Subsidies on Upland Cotton dispute. The European Communities and United States again exchanged comments on the implications of US non-compliance in two outstanding TRIPs disputes (the "Homestyle Copyright" and "Havana Club" disputes). The European Communities indicated its intention to implement DSB rulings and recommendations in the EC - Customs Classifications of Frozen Chicken Cuts dispute, and noted its need for a reasonable period of time (RPT) for implementation. Mexico informed the DSB of its mutually agreed solution reached with Panama in the Panama - Tariff Classification of Certain Milk Products dispute.

Next DSB Meeting

The next regular DSB Meeting will be held on 28 November 2005.

WTO Dispute Settlement: Developments of Interest

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

United States - Anti-dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico (WT/DS282/AB/R) Appellate Body Report, circulated 2 November 2005

United States - Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing") (WT/DS294/R) Panel Report, circulated 31 October 2005

Korea - Anti-dumping Duties on Imports of Certain Paper from Indonesia (WT/DS312/R) Panel Report, circulated 28 October 2005

European Communities - Export Subsidies on Sugar (WT/DS265, WT/DS266, WT/DS283) Article 21.3 Arbitration, circulated 28 October 2005

European Communities - The ACP-EC Partnership Agreement, Decision of 14 November 2001 ("Banana Tariffs Arbitration" WT/MIN(01)/15), circulated 27 October 2005

United States: Tax Treatment for "Foreign Sales Corporations" (FSC) (WT/DS108/RW2) P anel Report, circulated 30 September 2005

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Last Updated: 9 January 2013
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