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WTO: 2005 NEWS ITEMS

Dispute Settlement Body 19 May 2005

WTO dispute body adopts rulings on EC sugar export subsidies and on Dominican Republic's cigarette measures

The Dispute Settlement Body on 19 May 2005 adopted the Appellate Body and the panel reports on the European Communities' export subsidies on sugar. At the same meeting, the DSB adopted the Appellate Body and the panel reports on the Dominican Republic's measures affecting the importation and internal sale of cigarettes.

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NOTE:
This summary has been prepared by the WTO Secretariat’s Information and Media Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

Adoption of reports   back to top

When a panel report comes out, it is either adopted by the Dispute Settlement Body or appealed by one or more parties to the dispute. When the Appellate Body report comes out, it is automatically adopted by the DSB — unless there is consensus to reject it — and becomes binding.

Adoption of Appellate Body and panel reports

DS265, DS266 & DS283: European Communities — Export subsidies on sugar 

Australia welcomed the findings of the Appellate Body and the Panel. Australia said that it looked forward to the EC's full and prompt implementation and stood ready to discuss with the EC the period of time to do so. Among other comments on the Appellate Body and Panel reports, Australia mentioned that following the conclusions of these reports, the EC would have to reduce annual subsidized sugar exports from its current level of over 5 million tonnes to 1.2735 million tonnes.

Brazil, too, welcomed the adoption of the reports. Brazil explained that the reduction of the EC's subsidized sugar exports would result in enlarging the sugar international market by as much as five million tonnes per year, to the benefit of the competitive producers and exporters, most of them developing countries. Brazil added that nothing in the reports compelled the EC to change its preferential access for African, Caribbean and Pacific (ACP) sugar.

Likewise, Thailand welcomed the rulings confirming the inconsistency of EC export subsidies and sought to reassure ACP countries about a potential negative impact of the rulings on the current EC preferential regime for ACP sugar.

The EC said that it intended to comply but that the reports raised a number of systemic concerns. Among others, the EC mentioned the legal weight of a footnote in its agriculture schedule of commitments. The EC also talked about the relevance of the “Modalities paper” which is the basis for the scheduling of agricultural commitments.

Mauritius spoke on behalf of ACP WTO member States and expressed worries concerning the socio-economic impact of the findings on the weak and vulnerable ACP States. Mauritius explained that some ACP countries, for example St Kitts & Nevis, were already being forced out of their sugar production.

Canada urged the EC to minimize the potential adverse effect the implementation of the reports could have on ACP countries and on India.

St Kitts & Nevis said that it was currently planning its way out of sugar and asked that its attempt at adjustment be taken into account.

India noted with satisfaction the panel's suggestion that the EC endeavour to bring its production of sugar into line with domestic consumption whilst fully respecting its international commitments concerning imports from developing countries.

The Dispute Settlement Body adopted the Appellate Body and panel reports as amended by the Appellate Body.
  

DS302: Dominican Republic — Measures affecting the importation and internal sale of cigarettes

Honduras said that it was pleased to have prevailed in the vast majority of its claims. Honduras called upon the Dominican Republic to implement the rulings of the DSB in a prompt manner.

The Dominican Republic noted that the Panel and the Appellate Body found that three of the six measures identified by Honduras were in conformity with WTO rules.

The EC made some comments about the application of GATT Article III on national treatment.

The Dispute Settlement Body adopted the Appellate Body and panel reports as amended by the Appellate Body.

Implementation   back to top

After a ruling has been adopted, the DSB keeps under surveillance the implementation of the ruling until the issue is resolved.

Within 30 days after the date of adoption, the Member concerned must inform the DSB of its intentions in respect of implementation of the ruling.

Six months after the implementation time period has been fixed, the Member must start presenting at each DSB a status report of its implementation — until full implementation.

Implementation intentions

DS174 & DS290: EC — Protection of trademarks and geographical indications for agricultural products and foodstuffs

The EC said that it intended to fully implement. The EC explained that it would modify certain provisions of its geographical indications' regime relating to agricultural products and foodstuffs. The EC said that it would need a reasonable period of time to do so and declared itself ready and willing to discuss this with Australia and the US.

Australia and the US confirmed that they too were willing to discuss with the EC a period of time to implement.

DS285: US — Measures affecting the cross-border supply of gambling and betting services

The US said that it intended to implement and had begun to evaluate options to do so. The US added that it would need a reasonable period of time and stood ready to discuss this matter with the Government of Antigua and Barbuda.

Antigua & Barbuda — represented by its Finance and Economy Minister, Dr. Errol Cort — asked the US for more precision on its implementation plans. Antigua commented that implementation would require not only a clarification of the US' internet gambling restrictions but also market access for Antigua for the provision of gambling and betting services.

Implementation status reports

DS184: US — Anti-dumping measures on certain hot-rolled steel products from Japan 

The US said that legislation that would implement the DSB's rulings was being introduced in the US House of Representatives.

Japan welcomed this news, saying that it had been waiting over three years for it. Japan said that the introduction of a bill was an important step toward the full-fledged implementation of the DSB rulings. Japan recalled that the US had to implement by 31 July 2005.

DS217 & DS234: US — Continued Dumping and Subsidy Offset Act of 2000 (Byrd Amendment) 

In its status report, the US reminded the DSB that on 3 March 2005 legislation that would repeal the Byrd Amendment was introduced in the US House of Representatives.

The EC recalled that since 1 May 2005, it was applying a 15% additional duty on imports of certain products originating in the US.

Canada said that it too implemented retaliatory measures on 1 May 2005.

Korea strongly urged the US to repeal the CDSOA and stated that it would otherwise be obliged to seriously consider following the lead of the EC and Canada.

India noted it had retaliatory rights and that although its preferred option was compliance, it was looking at all possibilities.

Japan said that it intended to take appropriate actions if the current situation prevailed, including the exercise of its retaliatory rights.

Brazil and Chile made similar statements.

DS276: Canada— Measures relating to exports of wheat and treatment of imported grain

In its first status report, Canada said that it had put forward legislation on 11 March 2005 to implement the rulings of the DSB. Canada added that this legislation had now been passed by the House of Commons and was currently under consideration by the Senate, where it had been given a first reading on 12 May 2005. Canada said that it intended to be in full compliance by the agreed deadline of 1 August 2005.

The US requested more information on the way this new legislation would bring Canada in conformity with its WTO obligations.

Other implementation cases 

There are no new developments to report since the last DSB meeting on the following items: 

DS176: US — Section 211 Omnibus Appropriations Act of 1998 
DS160: United States — Section 110(5) of the US Copyright Act.
DS204: Mexico— Measures affecting telecommunications services.
DS246: European Communities — Conditions for the granting of tariff preferences to developing countries

Other business   back to top

DS264: US — Final dumping determination on softwood lumber from Canada

The US reported that it had implemented the DSB rulings through a new final determination on 15 April 2005and its implementation on 27 April 2005.

Next meeting   back to top

The next regular DSB meeting will be on 20 June 2005.

A special meeting of the DSB will take place on 1 June 2005. It will consider Canada's requests for a compliance review panel (Article 21.5) and for an authorization to apply sanctions (Article 22.2) in the case “US — Final dumping determination on softwood lumber from Canada” (DS264).