11 February 2000 DSB adopts "automotive leather" report
The WTO
Dispute Settlement Body (DSB), on 11 February, adopted a panel report (under Article 21.5
of the Dispute Settlement Understanding) which reviewed, at the US’ request, whether
Australia had fully implemented an earlier ruling by the DSB in June 1999 which required
Australia to withdraw subsidies to an automotive leather company. The report supported the
US complaint that Australia had not implemented the ruling and concluded that, in order to
do so, Australia must re-claim repayment in full of the prohibited subsidy.
The
US and Hong Kong, China, welcomed the report. Australia criticized what it described as
the panel's retroactive remedy, while Canada, Brazil, Japan, and Malaysia also expressed
concern over the report. The EC said the report required further study and reflection.
The
case was originally brought to the WTO by the US in June 1998. The US claimed that
payments made by Australia to an Australian leather company were export subsidies
prohibited under the Agreement on Subsidies and Countervailing Measures. The case went to
a panel which supported the US’ claim and recommended that Australia withdraw the
subsidies within 90 days of adoption of the panel report. Australia did not appeal the
panel’s findings, and the report was adopted by the DSB on 16 June 1999. However,
after the 90-days period had expired, the US claimed that the measures taken by Australia
to comply with the rulings were not consistent with the subsidies agreement. The US
requested that the original panel should examine Australia’s compliance under DSU
Article 21.5.
At the same DSB meeting,
Argentina, Chile and Korea announced briefly that they intended to implement,
respectively, the following reports: safeguards on footwear (document DS121); taxes on
alcoholic beverages (DS87 & DS 110); and safeguards on dairy products (DS98). The EC
was the original complainant in all these cases. To download these documents, please
go to our documents on line section
