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WTO: 2006 NEWS ITEMS

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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.

DS339, DS340, DS342: China — Measures Affecting Imports of Automobile Parts back to top

The DSB established a single panel at the second-time requests of the EC (WT/DS339/8), the US (WT/DS340/8) and Canada (WT/DS342/8) to examine their complaints that the measures implemented by China in respect of auto parts violated a number of WTO provisions and the Chinese Protocol of Accession. The complainants chose not to repeat the arguments contained in their panel requests and presented at the previous DSB meeting on 28 September, but emphasized that the Chinese measures discouraged auto manufacturers in China from using imported parts thereby giving rise to advantages for domestic production. The US added that, contrary to China’s suggestion at the previous DSB meeting, these measures could not be justified as intended to avoid circumvention. Given the identical nature of their claims, they requested that a single panel be established pursuant to Article 9.1 of the DSU.

China expressed disappointment that the three complainants had ignored its arguments and good faith to resolve the dispute through consultations. China said that panel requests were unproductive for an appropriate solution to this dispute, but that it remained confident that its measures were consistent with its accession commitments and the relevant WTO rules.

Argentina, Australia, Chinese Taipei, Japan and Mexico reserved their 3 rd — party rights.

  

DS343: US — Measures Relating to Shrimp from Thailand back to top

The DSB established a panel at t he second-time request by Thailand (WT/DS343/7) to examine US measures on shrimp from Thailand . Thailand referred to its statement at the previous DSB meeting and said that the WTO-inconsistent bond requirement and the use of the “zeroing” methodology, which had been outlawed by the Appellate Body, were endangering the lives of shrimp farmers from Thailand and putting at risk the fragile recovery of the shrimp industry which was critical to its economy and development. Thailand said that since the US had not made any serious effort to address its claims since the previous meeting of the DSB, Thailand had no option other than to request again the establishment of a panel in this case.

India spoke in support of Thailand’s request.

The US expressed regret over Thailand’s decision to request a panel. It said that Members had the right to ensure that importers paid duties owed and that the US was confident the Panel would recognize this fact and reject Thailand’s claims relating to the bonding requirement.

Brazil, Chile, China, India, Japan, Korea, Mexico and the EC reserved their 3 rd — party rights.

  

DS344: US — Final Anti-Dumping Measures on Stainless Steel from Mexico back to top

The DSB established a panel at the first-time request by Mexico (WT/DS344/4). Mexico stated that the use of the “zeroing” methodology by the US in original investigations and reviews was illegal as had been affirmed by several Panels and the Appellate Body. Mexico said that consultations between the parties had not been able to resolve the dispute leaving it with no option other than to request a panel.

The US expressed regret over the decision by Mexico to request a panel. It recalled that the US Department of Commerce had already announced its intention to abandon the use of “zeroing” with average-to-average comparisons in antidumping investigations, and that the issue of “zeroing” in admin istrative reviews was currently the subject of another dispute. Given these developments, even if a panel were to be established, it was the intention of the US to work with Mexico to find a solution.

Chile, China, Japan, Thailand and the EC reserved their 3 rd — party rights.

 

DS345: US — Customs Bond Directive for Merchandise subject to Anti-Dumping/Countervailing Duties back to top

The US blocked the first-time request by India for a panel (WT/DS345/6). India said that the Amended Bond Directive, under which the US could require importers of certain merchandise to post a bond covering the total estimated anti-dumping and countervailing duties on the value of imports of a particular product for the previous 12 months was burdensome and breached a number of provisions of the GATT 1994, the Anti-Dumping Agreement and the Subsidies Agreement. It appeared to India that the Directive was being applied in an arbitrary and discriminatory manner. To date, it had only been applied to imports of certain frozen and canned warm water shrimp from India and 5 other countries, according to India . It said that while consultations between the parties had been useful, they had failed to resolve the dispute between the parties, leaving India with no option other than to request a panel.

The US expressed disappointment with the decision by India to request a panel, and stated that Members had the right to ensure that importers paid duties owed. The US said that it had been working with India to understand its concerns and address them, hence the request was premature and the US could not agree to the establishment of a panel at the present meeting.

  

Other business  back to top

Statement by Brazil concerning the compliance panel composition in the “cotton” case

Brazil said that the decision by the US to object to the reappointment of two of the original panellists to serve on the Compliance Panel was unfortunate and set a “terrible precedent”. While it was true that they were nationals of third parties, the real reason, according to Brazil, was that these two panellists had ruled against the US in the original proceedings. Brazil stated that the US had routinely accepted original panellists to serve as panellists in compliance proceedings under Article 21.5 of the DSU and had in this case not objected to their nomination to serve on the original panel as well as to serve as arbitrators under Article 22.6 of the DSU. It was clear to Brazil DSU Article 8.3 had to be interpreted in light of Article 21.5. Brazil maintained that the US action in this case would encourage other Members to reject third-party nationals from serving in the future on compliance panels. This would not bode well for the effective functioning of the DSU, warned Brazil.

The US rejected Brazil’s statement, saying that it contained a number of factual inaccuracies. The US cited DSU Article 8.3, saying that citizens of members whose governments are third parties shall not serve on a panel concerned with that dispute unless the parties agree otherwise. The US said that the issue of third-party nationals not serving on a Article 21.5 panel was not new, and referred to two cases: DS257 the Lumber IV dispute; and DS207 the Chile Price Bands dispute. The US pointed out that the four parties in those disputes — the US, Canada, Chile and Argentina — all cooperated to find replacements for panellists who were third-party nationals, but in the current dispute Brazil rejected US efforts to cooperate. For the US, the real systemic issue in this case was whether the Director-General, in exercising his discretion under Article 8.7 of the DSU to appoint panellists, could disregard the dispute settlement procedures set out in the DSU, in particular Article 8.3 which provided that nationals of third parties might not serve as panellists.

Other items

No developments were reported since the last DSB meeting on 28 September 2006 .

  

Next meeting  back to top

The next regular meeting of the DSB is scheduled for 21 November 2006.

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