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New Chairperson
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The DSB elected by acclamation
Ambassador Amina Mohamed of Kenya as its next Chairperson. She thanked
delegations for electing her as Chairperson of the DSB and pledged to
carry out her functions to the best of her ability.
Implementation
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DS136
& DS162: US
— Anti-Dumping Act of 1916
The US stated that it was committed
to implementing all DSB recommendations and rulings and that the US Trade
Representative, Amb. Zoellick had been urging Congress in recent weeks to
work on necessary legislation to bring the US into compliance with its WTO
obligations. With reference to this case, the US said that legislation
repealing the 1916 Act was pending in both the US Senate and the US House
of Representatives and that the repealing bill before the House was
favourably reported out of the Committee on the Judiciary on 29 January
2004. The EC welcomed the positive vote by the House Committee on the
Judiciary and said that the EC was expecting that the next steps towards
implementation would be taken without delay. The EC reminded the US that
WTO arbitrators had recognized the EC's right to suspend concessions and
that prompt and full implementation by the US would make it unnecessary
for the EC to use this right. Japan said that it was extremely concerned
about the lack of the implementation by the US, and that this persistent
non-action by the US was damaging the credibility of the dispute
settlement system. Japanese companies were incurring substantial costs to
defend themselves under the WTO-inconsistent 1916 Act and that for the US
to fully comply with the rulings of the DSB, the repealing legislation
must have retroactive effect so that all pending cases would be
effectively terminated. Japan said that it had not yet made a final
decision on the reactivation of DSU Article 22 arbitration, but would like
to remind the US of its right to suspend concessions and other
obligations.
DS176: US
— Section 211 Omnibus Appropriations Act of 1998
The US recalled that the EC and the
US had agreed to extend the reasonable period of time for implementation
in this dispute until 31 December 2004, and stated that the US
administration was committed to working with the US Congress to find the
appropriate statutory measures that would resolve this dispute. The EC
said that there were two bills pending in the House and the Senate that
would effectively repeal Section 211. The repeal of the Act would
demonstrate the commitment of the US to effective and non-discriminatory
protection of intellectual property rights. Cuba said that the failure by
the US to abide by the recommendations and rulings of the DSB was damaging
the credibility of the dispute settlement system. It said that the status
report provided by the US was inadequate and that the US had been avoiding
its obligations by assuring the DSB that it was in the process of
repealing the 1916 Act. What was needed was concrete action to fulfil the
recommendations and rulings of the DSB.
DS184: US
— Anti-dumping measures on certain hot-rolled steel products
from Japan
The US referred to the decision by
the DSB on 10 December 2003 to extend the reasonable period of time for
the implementation of its recommendations and rulings to 31 July 2004. It
said that with respect to the DSB's recommendations and rulings that had
not been addressed in the 23 November 2002 anti-dumping duty determination
of the US Department of Commerce, the US administration was committed to
working with Congress to find a solution to this matter. Japan expressed
regret over the failure by the US to comply before the end of the first
session of the 108th Congress. It said that this was the second time that
the period of time for the implementation had been extended at the request
of the US, yet no demonstrable steps had been taken by the US to bring its
measures into conformity with the relevant rules of the WTO. Japan urged
the US to introduce the necessary legislative amendments for consideration
and passage during the second session of the 108th Congress.
DS217
& DS234: US
— Continued Dumping and Subsidy Offset Act of 2000
The US referred to its previous
status report and said that legislation to bring the Continued Dumping and
Subsidy Offset Act into conformity with US WTO obligations was introduced
in the US Senate on 19 June 2003 and in the House of Representatives on 10
March 2004. Furthermore, the US administration had proposed the repeal of
this Act in its budget proposal for the 2005 fiscal year and was committed
to working with Congress to achieve further progress in resolving this
dispute. A number of the complaining parties, including Canada, Chile, EC,
Japan and Korea expressed disappointment about the failure by the US to
repeal the Byrd Amendment. They urged the US Administration to take
concrete steps to repeal this Act which unfairly penalized exporters
twice. They said that unless the Act was repealed promptly, they would
proceed to suspend concessions and other obligations to the US, which
could only further disrupt trade between them and the US.
DS207: Chile
— Price band system and safeguard measures relating to
certain agricultural products
Chile said that it had complied with the recommendations and rulings of
the DSB and considered this matter closed. Argentina said that the
measures implemented by Chile did not fully implement the DSB's
recommendations and rulings and as such the matter could not be considered
closed. However, Argentina was willing to consult with Chile with a view
to finding a mutually satisfactory solution to the dispute.
DS257: US
— Final countervailing duty determination with respect to
certain softwood lumber from Canada
Canada informed the DSB that
following the adoption of the Panel and Appellate Body reports by the DSB
on 17 February 2004, Canada and the US held consultations and agreed not
to convene a special meeting of the DSB, but that the US would inform the
DSB of its intention regarding implementation in a letter, which it had
subsequently sent on 5 March 2004. In the letter, the US had stated that
it was prepared to meet with Canada and discuss implementation options.
Canada was looking forward to entering into discussions with the US as
soon as possible with a view to reaching an agreement on the reasonable
period of time for the implementation of the DSB's recommendations and
rulings.
The US said that it intended to
implement in a manner that respected its obligations. It said that it had
already begun evaluating options for bringing its measures into conformity
and that it looked forward to meeting with Canada in the near future in
order to reach agreement on the reasonable period of time.
Panels established
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DS294: US
— Laws, regulations and
methodology for calculating dumping margins (“zeroing”)
The DSB established a panel in
response to a request by the EC (WT/DS294/7/Rev.1) even though this was
the first time that the amended panel request had appeared on its agenda.
The EC said that by applying the “zeroing” methodology, the US was in
breach of its obligations under the relevant WTO rules. The EC thanked the
US for accepting the establishment of the panel at this present meeting.
The US said that as regards the
substance of the EC's claim, the US disagreed with the view that the
Antidumping Agreement required investigating authorities to offset
calculated dumping margins with so-called “negative margins”.
The following Members reserved
their third-party rights: Argentina, Brazil, China, Chinese Taipei, India,
Japan, Korea, Mexico and Norway.
DS301: EC
— Measures affecting trade in commercial vessels
The DSB established a panel, as
this was the second time that the matter had appeared on its agenda
(WT/DS301/3). Korea said that the Temporary Defense Mechanism established
by the EC pursuant to Council Regulation 1177/2002 of 27 June 2002, as
well as implementing legislation adopted by certain EC member states
violated Article 23 of the DSU, which prohibited Members from taking
unilateral action in disputes.
In response, EC said it deplored
what it termed as procedural manoeuvring by Korea. EC said that it was
engaged in consultations with Korea over some measures, which were also
the subject of this panel request. It would have been more logical if
Korea had waited for the outcome of the consultations before proceeding
with this request. EC said that should Korea decide to proceed with its
request, the EC would vigorously defend its measures before the Panel.
China, Japan and the US reserved
their 3rd-party rights.
Other business
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Statement by the US on the Award of
the Arbitrator in DS136 US Anti-Dumping Act 1916
The US said that it was committed
to full compliance with its WTO obligations in this dispute and was
pleased with the finding by the arbitrator that the EC had no current
right to suspend concessions towards the US. It said, however, that the
recent award of the arbitrator raised a number of significant issues
concerning the operation of Articles 22.6 and 22.7 of the DSU which
merited serious reflection. While the US appreciated that the arbitrator
strove for a balanced result in his award, Article 22.7 did not mandate a
balanced result, but a balance between the level of suspension proposed
and the level of nullification or impairment. Thus, if the level of
nullification and impairment is zero, the award must also be zero. The US
also said that the arbitrators disregarded the fact that no specific
judgments or settlements under the 1916 Act – not past, current, or
certainly future – were within the terms of reference of the original
dispute, nor were they the subject of DSB rulings.
The US further stated that the
arbitrators did not always correctly apply the principles enunciated in
Article 22.6 of the DSU. While the arbitrator had stated that in
determining the level of nullification and impairment, it was necessary to
rely on “credible, factual and verifiable information” and that claims
that were “too remote or too speculative” or “not meaningfully quantified”
were to be rejected, he nevertheless concluded that final judgments under
the 1916 Act “clearly nullify or impair” EC benefits without analysis
beyond the fact that the dollar figures were final, public and verifiable.
Similarly, they held that public settlements could be used to measure
nullification or impairment for the same reason. After holding that the
EC's proposed suspension measure was not equivalent to the level of
nullification or impairment, they proceeded to define the level of
nullification or impairment as a formula to be applied by the EC based on
future effects. By not fixing the level, the arbitrators abandoned their
responsibility and departed from previous WTO awards. It appeared that the
arbitrators relied heavily on Article 3.8 of the DSU to hold that the
level of nullification or impairment was greater than zero, even though
there were no current judgments, public settlements or pending cases
against EC companies. This reasoning was faulty and contradicted the award
given by the arbitrators in the Banana case, where the arbitrators held
that with respect to trade in goods, the nullification or impairment of US
benefits was equal to zero.
It would seem to follow from the
award that a Member could only rebut the presumption of nullification or
impairment during panel proceedings, and not in an arbitration under
Article 22.6. Such a distinction was unwarranted and had no textual basis.
The US concluded by saying that if the arbitrators' reasoning was correct,
then every past arbitration was wrong and every future arbitration should
follow that reasoning. There was no basis for applying different standards
in different disputes. It was the hope of the US that the approach adopted
by the arbitrators in the 1916 would not be repeated.
The EC said that the award of the
arbitrators was significant at least in three respects. First, it
reaffirmed that a Member might not violate its obligations with impunity.
The non-implementation of DSB recommendations and rulings necessarily led
to nullification or impairment and created the right to suspend equivalent
obligations or concessions. Second, it confirmed that the benefits
accruing under the WTO Agreements were not limited to trade benefits.
Third, it recognised that the level of suspension of concessions or
obligations might be varied to reflect the actual level of nullification
or impairment caused by the non-implementation of the DSB's
recommendations and rulings. The EC said that these principles were
important for the proper and effective functioning of the dispute
settlement system. The EC expressed disappointed that the arbitrators did
not include litigation costs in their award, given the significant costs
incurred by EC companies to defend themselves under the WTO-inconsistent
Act. A number of Members, including Canada, India and Japan, expressed
support for the award given by the arbitrators.
Next
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The next meeting of the DSB is
scheduled for 20 April 2004.
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